Long-Term-Care Insurance: Most Still Don't Buy In
Long-Term-Care Insurance: Most Still Don't Buy InBy Andrea Coombes (Wall Street Journal)
A growing number of people are aware they may face steep nursing-home and other long-term-care costs as they age, but few are willing to purchase long-term-care insurance, according to a new survey of California residents.
Consumers are twice as likely now, compared with 17 years ago when the survey was first fielded, to say they know that typical health-insurance plans don't pay for long-term care, according to a Field Poll of 950 adults for the California Partnership for Long-Term Care, a program of the state's Department of Health Care Services that partners with insurers to certify policies that meet specific consumer-protection requirements.
And 52% of consumers surveyed said that more than half of older Americans will need long-term care in their lifetimes -- up from 42% giving that response in the same survey six years ago.
So, more consumers are aware of the potential problem, but some are still underestimating the figures: 70% of older Americans will need some type of long-term care -- which may include help with grocery shopping, bathing, dressing, eating and other tasks -- at some point, according to the U.S. Department of Health and Human Services.
Also, consumers are gaining ground in estimating nursing-home costs. While 64% of respondents to the Field Poll still underestimate the annual cost of nursing-home care, pegging it at less than $70,000, fully 23% said that costs total "$70,000 or more," according to the survey -- an increase from 8% who provided that response in the 2005 survey.
The average annual nursing-home cost in California is more than $91,000, according the California Partnership for Long-Term Care.
Still, despite the growing awareness of long-term-care costs, about 7 million people are covered by individual long-term-care insurance nationwide, according to LIMRA, an insurance-industry research and consulting firm.
That's about 18% of the almost 40 million people over the age of 65 in the U.S., according to 2009 data from the U.S. Census Bureau. A 2004 study by the National Bureau of Economic Research found that 10% of people aged 65 or over have purchased long-term-care insurance policies.
Too costly, and uncertain
The most-often-cited obstacle to purchasing long-term-care insurance? The cost. Fifty-nine percent of respondents said long-term-care policies cost too much, 55% said they haven't thought about it and 32% said their family assets and income will cover the cost.
"People are saying, 'I know I need to do something. I really don't have the money for this,' " said Brenda Bufford, director of the California Partnership for Long-Term Care. "We're saying start planning for it."
Another 29% of survey respondents said they have not bought a policy because insurance companies can't be trusted to cover the costs incurred.
Certainly, fears that an insurance company may go out of business, and worries about premium hikes, keep people from buying policies -- and those fears are justified by past experience.
"There have been a lot of concerns," said Katy Votava, president of Goodcare.com, a consulting firm that works with financial advisers and their clients to help them save money on health-care costs. "Will the coverage be there -- will the company be there for me -- when I need it? About 10 years ago, we had a lot of market consolidation."
Even in the past year or so, Votava said, some companies have exited their long-term-care business or raised rates.
Generally, if a company leaves the business, another company buys those policies, but that may pave the way for premium hikes. To find out more about a particular company, check out your state's insurance-department website, Bufford said.
Also, Votava said, insurers now sell hybrid products -- such as an annuity or life-insurance policy with a long-term-care rider -- that might be more palatable to consumers. If you never need the long-term-care benefits, she said, you still can tap the value of the annuity or life insurance.
As for price being a barrier to many potential buyers, "if you buy long-term-care insurance and need it, it's going to be a bargain," she said, "but if you never use it you're going to feel it was expensive." The policies that Votava said she recommends usually cost about $3,000 to $4,000 a year.
-Andrea Coombes; 415-439-6400; AskNewswires@dowjones.com
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As Homeowners Dive Into Pool Of Flood Insurance, Caveats Abound
As Homeowners Dive Into Pool Of Flood Insurance, Caveats AboundBy ANNAMARIA ANDRIOTIS
The recent weeks of tropical storms and other wet weather have pushed a new wave of homeowners into the market for flood insurance. What they are finding, however, are policies better suited to Tampa, Fla., than Teaneck, N.J.
Insurance companies have reported a surge of demand for flood insurance in the wake of storms Irene and Lee, even in landlocked states like Pennsylvania and Vermont, which both suffered flooding in some areas. Chubb Corp. says inquiries about and applications for its flood policies are up about 30% since late August, compared with the same period a year ago. Farmers Insurance Group of Cos. says its sales of federal flood insurance rose as much as 38% from July to August in some Northeastern states, and some independent insurance agents in the Northeast say that since Hurricane Irene in particular, up to 10% of clients have inquired about or applied for flood insurance.
But basic flood policies, most commonly provided by the National Flood Insurance Program and sold through private companies, cover damage starting on a home's first, above-ground floor, with limited coverage for basements. That usually is adequate in the Gulf Coast region, where houses don't tend to have below-ground levels. But it is less so in the rest of the country, where those features are common, says John Prible, vice president for federal government affairs at the Independent Insurance Agents and Brokers of America, an industry group. Federal flood policies will pay to replace specific items in a flooded basement, including hot water heaters, furnaces or other mechanical equipment, but ruined carpeting, furniture and fixtures would be excluded.
For many homeowners in the Northeast, the limits of coverage may not be enough. The federal flood program will cover up to $250,000 to rebuild a home and $100,000 in contents. That may suffice in New Orleans, says Scott Simmonds, an insurance consultant in Saco, Maine, but it falls short in Boston or New York, where materials and labor costs are higher.
To have full coverage, then, homeowners in the Northeast could need at least three different insurance policies, Mr. Prible says: basic home insurance; additional flood insurance; and a third, supplemental flood policy that would cover damage to basements and cellars, and also offer higher limits.
The costs quickly add up. While they vary widely, homeowners insurance premiums averaged about $800 a year in 2010; flood insurance adds another $600 on average. Premiums for supplemental flood coverage vary widely depending on the area of the house, but in states where the risk of floods is deemed low, additional flood coverage could add another $300 to $400 for a $500,000 home with a basement, according to Fireman's Fund Insurance Co., a subsidiary of Allianz SE.
As pricey as the coverage can be, and as rare as storms are, few homeowners hold on to flood insurance for long. Typically, demand spikes after extensive flooding, but homeowners usually let policies lapse within two to four years, according to a recent study by the Wharton Center for Risk Management and Decision Processes.
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The top 10 cars that thieves hate the most
Having seen how car thieves have a special attraction for the Cadillac Escalade, what cars do they hate the most?
By Chris Woodyard, USA TODAY
Interestingly, it's a mix of cars and midsize SUVs, such as the Chevrolet Equinox, the Highway Loss Data Institute reports. It may not be because it isn't cool to be cruising around in an Audi A6 or an Equinox. Rather, it may be because these vehicles have really good anti-theft mechanisms.
It's clearly not because these vehicles are undesirable. Looking over the list, they are all fairly popular, even if some are niche vehicles.
Here's the top 10 cars that thieves reject:
Audi A6 all-wheel-drive, large luxury car
Mercury Mariner (2009-10) small SUV
Chevrolet Equinox (2010) midsize SUV
Volkswagen CC (2009-10), midsize car
Chevrolet Equinox four-wheel-drive (2010) midsize SUV
Lexus RX 350 (2010) midsize luxury SUV
Saturn Vue midsize SUV
Chevrolet Aveo (2009-10) mini station wagon
BMW 5 Series all-wheel-drive large luxury car
Mini Cooper Clubman two-door car
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