In June, “Insurance Awareness Day” is set aside as a day to review one’s insurance policies. When reviewing your files, consider any changes that may have come about in your life. Do you need to purchase more coverage? Over the years, we have discovered some of our clients did not have adequate coverage for their current situation. Here are their stories:
Rita, Jennifer, and Sharon all had homeowners insurance for their co-op apartments, but the extent of the coverage was limited. They each had bought insurance when they purchased their co-ops, but as the value of their property increased, they had not increased their insurance to keep pace. In addition, artwork by fledgling artists that they bought or had been given years prior was now worth a great deal. Rita’s beautiful Chinese print was damaged by vendors working in her home. Unfortunately, there was no way to get reimbursement from the companies and her home insurance did not cover the repair. She would have needed insurance for specific art pieces.
Sharon owned two apartments, one where she worked as an artist and had studio assistants. As we paid her bills and reviewed documents and insurance policies, it became clear that she did not have insurance (fire, theft, liability, etc.) for her second property. Nor did she have workers compensation insurance in case one of her assistants had an on-the-job accident.
Insurance needs to reflect the title on the property. Robert recently put his home in a trust, but his insurance remained in his name. Eddy & Schein Group reminded him that he needed to change the name on the insurance from his to that of the Trust.
It did not occur to Joan to purchase tenants insurance for her rental apartment, but had she been burglarized or had a fire or flood destroy her possessions or those of her neighbors, she would have had to replace the contents herself. Tenants insurance also provides liability insurance in case someone is injured in the rented home. Landlord’s insurance may cover some costs depending on the circumstances, but it is wise to pay the small premium for coverage.
George wasn’t sure that he had the best policy, so we worked with him and an insurance broker to review what was covered and the cost of various policies, and to help George pick the one he felt was best.
Bob had remarried. We were working with him reviewing his retirement plans and stated beneficiaries. In the course of the discussion, Bob realized he had not changed his life insurance beneficiary from his ex-wife to his current wife. This was also a good time for him to discuss with his insurance agent whether he had sufficient coverage.
There are many moving parts when it comes to health insurance. The biggest concern for our clients is often whether the policy covers out-of-network services as well as in-network. For one family, the psychiatric care that the children needed was only available out-of-network. In weighing the cost of the larger premiums versus the cost of medical care, our client decided to purchase a policy that included out-of-network coverage.
When it comes to Medicare, Original Medicare (Parts A & B) provides more options than Medicare C. While having Medicare A and B is more expensive, it is usually a better choice than an Advantage Plan (Medicare C), since that plan does not cover people when they travel and has a specific and limited network of service providers.
It’s important to also enroll in a secondary (supplemental) plan to cover the 20% that Medicare A & B does not pay. In choosing a secondary plan in conjunction with original Medicare there are many choices. Marnie chose a less expensive option and it did not cover her copay for rehab, so we helped her get a better plan and she is fully covered going forward.
Long-Term Care Insurance
Anna chose, at the age of 77, to purchase long-term care insurance (LTC), rather than have to be on Medicaid like her husband was. She worked with Eddy & Schein Group, her insurance broker, and her financial advisor to create a plan so her investments would generate the funds needed to pay the premiums. Three years later she had a stroke; the policy allowed her nieces and nephews to provide the best care possible for her until her death.
The alternatives to purchasing LTC insurance would have been paying for long-term care from assets until they ran out, and then going on government-funded Medicaid.
Patricia and her husband had purchased LTC insurance a long time ago. When he needed care, she discovered that the policy provided $72 a day which was helpful but a far cry from the $200 a day they were paying for home health aides. Working with a broker referred to her by Eddy & Schein Group, she was able to purchase an additional policy for herself that will work with her old policy and give her more complete coverage when she needs it. Patricia could afford to pay for full-time home care for a long time if she did not have LTC insurance, but she has chosen to spend money now on premiums and leave the investments for her family.
Have you reviewed your insurance coverage? If you need help, don’t hesitate to reach out to your insurance broker or call Eddy & Schein Group for support in the process.