CONSUMERS SHOULD KNOW…
(David’s professional opinion) ABOUT HEALTH INSURANCE - -
Not all health plans are created equal. Health plans offered through “associations” or “purchasing alliances” are often high-commission, low-benefit coverage, usually with hidden or glossed-over deficiencies. RED FLAGS: requirement to meet personally with sales rep; sales rep won’t leave materials for review; rates not published or available on line; rep attempts to hurry purchase due to “imminent” rate increases; rep bad-mouths competitors as basis of sales pitch; heavily scripted or lengthy sales pitch that emphasizes membership in organization, and/or other non-insurance benefits. BOTTOM LINE: Use a dependable, well-established independent broker. It doesn’t have to be us!
(David’s professional opinion) ABOUT LONG TERM CARE INSURANCE - -
This valuable coverage has become A) simply too expensive for the middle market purchaser, and B) often almost incomprehensible in plan design. Middle-income consumers should consider “short term” LTC coverage (6 – 18 months benefit) as a possible financial compromise. The vast majority of LTC claims do not exceed 18 months. Larger estates should still consider full coverage due to the skyrocketing cost of quality custodial care. Adult children of well-off parents should consider whether losing $70,000 - $100,000 / yr (metro area nursing home costs or 24 hr in-home care costs) would erode their inheritance. Many financial planners recommend it, but these same planners are not experts in crafting the right policy - - which takes awareness of Medicare, Medicaid/Medi-Cal, estate planning concerns, etc. Also, many financial planners may restrict their LTC offering to a few high-commission bidders. Ideally the planner teams with an LTC specialist. RED FLAG: your planner or sales rep only offers one company (lunacy in the open LTC market due to myriad options and advantages of various carriers). BOTTOM LINE: Never be afraid to ask about commissions, and strive to have an experienced, independent LTC agent involved.
(David’s professional opinion) ABOUT ANNUITIES - -
Due to high commissions, these perfectly benign savings plans have been severely over-emphasized and over-sold by many purported “financial planners” or “financial consultants”. In any sale where agent commissions are the highest priority, annuities will always be emphasized – and their disadvantages glossed over or misrepresented. ANNUITIES DO HAVE A PLACE in planning for retirement, but ONLY WHEN FULLY EXPLAINED and patiently compared with the alternatives. REMEMBER THAT IRA-s or 401k-s, etc, are ALREADY TAX-DEFERRED. RED FLAGS: group settings such as seminars or classes offered by local financial “planners”. 99.9% of these events are simply disguised sales pitches (no matter what is said to the contrary) for various types of annuities; newspaper ads for high CD rates from non-bank providers – 99.9% of the time an annuity will be proposed as a desirable alternative, often under time pressure. BOTTOM LINE: for medium to long term savings (5 years or more), educate yourself about annuities before shopping around. An experienced independent agent or broker – or a true, Fee-Only financial Planner - can be a big help. We are always happy to answer general questions about annuities.
Contact David Whiteside:
or EMAIL: info@LTCworks.com
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