Insurance

The BestVest Insurance program offers a full range of insurance products and services including, Long-Term Care, Disability, Term and Permanent Life insurance from many carefully chosen insurance providers. 

To learn more about the insurance products available through BestVest, contact a BestVest representative or explore Types of Insurance and Long Term Care Insurance

Types of Life Insurance

Term Life

Term life insurance is designed for cost conscience investors and is the most cost-effective form of life insurance.  It is generally used to provide basic protection for a specified period of time. While cost-effective, term life insurance owners accumulate no cash values in their policies.

Permanent Life

As long as one pays one’s premiums on time, permanent life policies provide coverage for the insured person’s life.  Such policies never expire or need to be renewed. The death benefits are paid to the beneficiaries upon the death of the insured.  Policies can have cash value or a savings feature. Permanent life insurance includes whole life, universal, and variable insurance policies.

Whole Life

In this variant of permanent life insurance, the death benefit, premium, and cash value amounts are constant from the purchasing of the policy until the time of death.  The benefits of such a policy are that the cash value always stays intact and earns interest while the death benefit never decreases.  The disadvantages is that the carrier invests the premium conservatively, generally generating a low rate of return.

Universal Life

This insurance product is a more flexible version of whole insurance, allowing premiums to be changed within set boundaries. Consequently, death benefits vary. This flexibility of premiums, however, means that the policy is sensitive to interest and the policy’s cash value is not guaranteed.  However, some newer universal life insurance products now offer some minimum rate of return and death benefit guarantee. 

Variable Life

This type of coverage allows owners to choose the policy’s investments. This feature adds a significant amount of risk, due to the policy’s cash value’s reliance on investment performance.  There are no minimum guarantees associated with such products.   Such investments mature tax-deferred until the policy is redeemed.

Long-Term Care Insurance

What is Long-Term Care?

Long-term care is any combination of medical and support services for people with prolonged illness (e.g. HIV), degenerative conditions (e.g. Parkinson’s), a cognitivie disorder (e.g. Alzheimer’s), or who are unable to perform certain daily living functions (e.g. bating, dressing, or eating).  Assistance can be provided through home health care, a live-in nurse, a nursing home, adult day care, or an assisted living facility.

Who Should Consider Long-Term Care Insurance?

Individuals over the age of 50 that are relatively healthy and have assets worth protecting should consider LTC insurance. Additionally, individuals who have a family history of Alzheimer’s, Parkinson’s, cancer, and simply longevity should discuss this form of insurance with a financial consultant.

Why?

The average age a person lives to is constantly increasing.  However, Medicare doesn’t provide long term care. It provides care for a maximum of 100 days and only if the care is following a hospital stay. Medicaid doesn’t allow a choice of facilities and is only available after a full spend down. Medicaid is basically a form of welfare, and the designated Medicaid facilities may not be where you would want your parents to stay or live.

The Cost of LTC Insurance

The average nursing home charges $60,000 per year.  So, for a stay of just 2 years, the costs would rise well above $100,000.  The average LTC insurance policy premium for a 60-year-old couple applying for $150/day, five years of coverage, 90-day elimination period, and compound inflation would be $2,050 each. If it took 15 years before that couple needed LTC benefits, it would take just 100 days in a nursing home to recoup the premiums.

Points of a Policy

Financial Strength - Benefits are generally not needed from a policy for 10 to 20 years after they are purchased, so you must ensure that your carrier has the financial viability to be around for 20 years. One should ask about an insurance carrier’s ratings, who endorses them, and if they’ve ever had a premium increase.

Adequate Daily Benefit - Be aware of the cost of care in your area or the area where you plan to retire.

Inflation Protection - It is important to ensure that the benefit will be sufficient when it is required in 10 to 20 years.  To make certain that it will be sufficient, one should buy inflation protection.  Suggestion: Try using compound inflation for up to age of 68, simple inflation from 69-74, and no inflation from 75+ in order to determine the level of inflation protection required. 

Comprehensive Coverage – The policy should provide coverage in all the settings in which you are interesting, including home care, adult day care, nursing home care, etc.  Be sure that the benefit period will be adequate to cover all possibilities.  The average stay in a nursing home is two and half years. 

Stable premiums - LTC carriers reserve the right to raise insurance premiums. However, the policies are guaranteed to be renewable, which prevents a carrier from singling out individuals for rate increases, but premiums may be raised for an entire class of policyholders. Carriers that are priced substantially below the competition should be viewed with skepticism. Always be sure to ask if the carrier has ever increased in-force premiums.