Why Would You Need Long-Term Care Insurance?

According to a recent article in Forbes, the average cost of a private room in a nursing home is $87,000 a year. For most people, thats an overwhelming expense, and its probably not the only one. What if you require nursing home care, and your spouse still has a mortgage or rent to pay? Managing both living expenses can be financially devastating.

Standard employer-based medical insurance doesnt cover long-term care. Neither does Medicare. While Medicaid offers some long-term care services, the financial requirements for receiving benefits vary from state to state and are often strict. This can make it difficult to qualify. So for many, long-term care insurance can help provide the health-care protection you desire.

When is a Good Time to Apply for Long-Term Care Insurance?

Long-term care policies are typically offered to individuals who are reasonably healthy. Most people who consider this type of insurance are generally between the ages of 52 and 64. The younger you are when you apply for this coverage, the lower the premium.

Another reason to consider applying early is that according to the American Association for Long-Term Care Insurance (AALTCI), only 11 percent of applicants who apply for this coverage are turned down at age 50 or below, while 24 percent are declined between ages 60 to 69.

What Are the Benefits of Purchasing Long-Term Care Insurance?

If you have substantial assets or savings, you may be able to self-finance your long-term care. But for most people, the thought of spending their life savings to pay for the high cost of nursing or home care is not an attractive option. Long-term care insurance helps protect your assets and eases the burden of asking your children or other family members for assistance.

Once you purchase long-term care insurance, your policy cant be cancelled and rates cant be raised based on changes to your personal health status. Rates can only be raised across the board in your policy class. The policy is usually guaranteed for life and generally can only be cancelled due to non-payment of premiums.

Long-term care insurance premiums may even be eligible for an income tax deduction. Check with your accountant to see if you qualify.

What Are the Risks of Purchasing Long-Term Care Insurance?

Long-term care insurance is expensive. As with life insurance, you are buying protection against a worst-case scenario that you hope never occurs. Unlike certain forms of life insurance, you cant tap into the policys cash value and borrow from it.

Most long-term care policies dont pay out benefits until you have been certified as chronically ill and received care from an eligible provider for a specific time period--known as the elimination period. The elimination period is similar to a deductible under other types of insurance policies, and it is the number of days you receive and pay for eligible care before receiving benefits. In most states, State Farm® offers Long-Term Care Insurance with a choice of 30, 90 or 180 day elimination periods. After meeting the chronically ill certification requirement and satisfaction of this period, benefits will be paid for each day of eligible care for charges incurred up to the daily benefit amount in your policy.

What Factors Are Important in Purchasing Long-Term Care Insurance?

Here are some things to consider to help you determine whether to purchase long-term care insurance:

Age. The older you are when you purchase long-term care insurance, the more expensive it will be.

Gender. On average, women outlive men by five years and are more likely to live alone, without assistance.

Health status. If there is a family history of certain chronic illnesses (such as high blood pressure or diabetes), you are more at risk of health problems later in life and might need additional financial assistance as you age.

Financial resources. If you do not have enough personal savings to afford a year in a nursing home or two and a half years in an assisted living facility, then purchasing long-term care insurance can help ease the financial burden of long-term care services.

To learn more about Long Term Care Insurance or to get a customized quote, contact local State Farm agent Rick Marteeny.  Rick's office is located at 326 S Buchanan St. in Edwardsville.  You can reach Rick at 618-656-1731 or at www.InsureWithRick.com

If you're a grad student, it's best to read the latest report from the National Science Foundation with a large glass of single-malt whiskey in hand. Scratch that: The top-shelf whiskey is probably out of your budget. Well, Trader Joe's "Two Buck Chuck" is good, too!

Liquid courage is a necessity when examining the data on PhDs in the latest NSF report, "The Survey of Earned Doctorates," which utilized figures from the University of Chicago's National Opinion Research Center. The report finds that many newly minted PhDs complete school after nearly 10 years of studies with significant debt and without the promise of a job. Yet few people seem to be paying attention to these findings; graduate programs are producing more PhDs than ever before.

Getting a PhD has always been a long haul. Despite calls for reform, the time spent in graduate programs hasn't declined significantly in the past decade. In 2014, students spent eight years on average in graduate school programs to earn a PhD in the social sciences, for example. It takes nine years to get one in the humanities, seven for science fields and engineering, and 12 for education, according to NSF. In other words, PhDs are typically nearing or in their 30s by the time they begin their careers. Many of their friends have probably already banked a decade's worth of retirement money in a 401K account; some may have already put a down payment on a small town house.

While most doctoral students rely primarily on some combination of grants, teaching assistantships, and research positions to cover tuition and living expenses, they also often use personal savings, spouses' earnings, and student loans. Consequently, more than 12 percent of all PhDs complete their doctoral programs with over $70,000 of combined undergraduate and graduate student-loan debt. Rates are especially high in the social sciences and education. Those debt levels are alarming, especially because fewer students have jobs lined up immediately after graduation than was the case 10 years ago.

The job market for those with advanced degrees is clearly tightening, according to the NSF study, with many more PhDs in all fields reporting no definite job commitments in 2014 compared to 2004. Nearly 40 percent of the PhDs surveyed in 2014 hadn't lined up a job--whether in the private industry or academia--at the time of graduation.

  • Business
  • Pensions
  • Social Security
  • United Kingdom

Many economists argue that low interest rates are the result of too much saving, rather than too little. A "savings glut" means that the returns from investing have inevitably fallen. Unfortunately, the savings aren't really accumulating in the right places. The ageing citizens of the rich world should be putting lots of money aside for their old age, but personal savings rates are generally low.

Britain's household-savings ratio perked up after the 2008 crisis, without ever reaching the 16.5% recorded in the last quarter of 1992. In the fourth quarter of 2015 it was 3.8%, well below the average level since 1963, of 10%. The American savings ratio is 5.4%; between 1963 and 1985, it often exceeded 10% (see chart).

In economic textbooks, companies use the savings of households to finance their expansion. But for much of this century companies in the developed world have been net savers. In Japan this has been going on even longer.

Given the ultra-low interest rates available on cash, and with investment-grade corporate bonds yielding just 3%, you might think there would be lots of profitable projects for companies to invest in. Although corporate investment has picked up since the 2008 crisis, it is hardly booming. Perhaps companies are cautious about the outlook for demand; perhaps competitive pressures are not what they were; perhaps they are simply using their cash to buy back shares. Whatever the reason, their behaviour has changed.

In theory, a financially strong corporate sector is good news for workers. Their employers could be putting aside a lot of money to meet their future pension commitments. In practice, however, the switch from final-salary pension schemes to defined-contribution (DC) plans means that employers' pension contributions are lower than before. The average American employer ponied up just 4.5% of pay in 2013. Many people are going to depend on the state in their old age. As it is, more than a third of retired Americans get more than 90% of their income from Social Security.

If a country's private sector has net savings, then mathematically the government must be running a deficit or the country must be exporting the excess, generating a current-account surplus. Deficit financing by governments makes sense as a way of stimulating demand in the short term. But it could be argued that rich countries with ageing populations should be running current-account surpluses and investing in faster-growing emerging markets. The euro area, in aggregate, does follow this approach (although Germany, its biggest economy, is often criticised for doing so), but Britain and America run persistent current-account deficits. Instead many countries in the emerging world, including China and Taiwan, are investing huge surpluses abroad. Although very low or negative rates in the developed world should discourage this, they seem to be having little effect.

Meanwhile, governments in the developed world face big long-term financial challenges. A recent report from Moody's detailed the unfunded liabilities facing the American taxpayer: 75% of GDP for Social Security, 18% for Medicare, 20% for the cost of pensions for federal employees and another 20% for pensions in state and local government. Britain has unfunded pension liabilities (for government employees) of around 66% of GDP.

Perhaps governments will deal with those challenges by cutting benefits or raising taxes. But if workers think that will happen, they should be saving more now in order to compensate for that future hit to their incomes. There is no sign that they are doing so. Indeed, governments don't want to see a huge rise in household saving in the short term because of the impact on demand. It's the equivalent of St Augustine's plea, "Lord, make me chaste, but not yet". And it is another sign that economies are in a mess.


CHIVI: A 34 year-old woman employed as a clerk at a saving club in the Masvingo district is in trouble with the law after allegedly defrauding her employer of $40,000 through underhand cash transfers.

Florence Nhopi is said to have been transferring the clubs money into her personal savings and those of trusted relatives via eco-cash transfer system.

She appeared before Masvingo magistrate Sibonginkosi Mkandla on Tuesday facing 500 counts of theft.

Nhopi denied the charges and was remanded in custody to 21 April for continuation of trial.

This is after the state had opposed bail insisting she was a flight risk considering the "seriousness" of the charges she is facing.

Appearing for the state, Makaita Chikamhi told court that from June 2013 to 31 December 2015, Nhopi was tasked by her employer to work as an Ecocash teller for the Saving and Credit cooperative and was given the clubs Ecocash agent line.

Court heard that during the period, she used her position to transfer various amounts from the cooperatives agent line to her own mobile number.

Court was told that she transferred $9, 678 to her personal mobile number after sending various amounts 92 times.

Court also heard that her husband received a total of $5, 057 which was sent over 23 times while her two sisters and a cousin pocketed a total of $2, 753 that was transferred into their ecocash accounts in various amounts 17 times.

It was further alleged that a security guard employed by the club also received $808 from Nhopi using the same modus operandi, while the balance was also transferred to various individuals bringing the total number of illegal transfers to 500.

A total of $42, 710 was lost and nothing was recovered.

The matter came to light after the clubs chairperson and treasurer, in 2015, requested to audit the savings clubs financial books.

In the process, he requested the ecocash agent account and a print out of all transactions since 2013 from Econet.

Court was told anomalies were unearthed from Nhopis ecocash records whose figures did not tally with those on the printout.

A police report was made leading to Nhopis arrest.