Home Ask Question Answer Questions My Q&A Categories Ask the experts Expert leader board

Seema's Questions & Answers

in Beauty & Fashion, Food & Drink& Personal Finance & Tax

11

Rank

Total Points: 53264

Answers Given: 7896

Questions Asked: 26

Best Answers: 42

When to Get Long Term Care Insurance ?

Asked by karn singh in Personal Finance & Tax at 2:50 PM on February 20, 2009

Seema's Answer

Many financial experts say that nobody who has a net worth of at least $2 million should pay for an LTC policy; their own assets will be able to cover all long term care services should they ever need them. On the other hand, they also advise that anyone who is worth less than $200,000 simply cannot afford long term care insurance (the premiums aren't the cheapest, compared to other forms of insurance) and will have to rely on government assistance programs--Medicare and Medicaid--if they ever need long term care.

On the other hand, the cost of actual long term care (stay in a nursing home, stay in an assisted care facility, or in-home special nurse care) is enormous and one the rise. Surveys have shown that as of today the average cost of staying in a nursing home is $213 a day (rates vary depending on geographic location) and can be expected to pass $400 a day by the year 2030. On average, once a person enters a nursing home facility they stay two-and-a-half years. Going by today's rates that's over $194,000; the future projected rate means you'll pay approximately $372,000. And 45% of all Americans who live to 65 or older can expect to need some form of long term care. Even people who are only 32 years old are six times as likely to need long term care as they are to die in their near future.

Suddenly, premiums of $750 to $1500 per year don't sound all the expensive, do they? However--only 9% of Americans will need to stay in a nursing home, with another 18% needing long term assisted living facility care. So, things get curiouser and curiouser.

However (again), "long term care" can mean care in the home by nursing specialists that lasts for a period of many months. It's this kind of care that a great many elderly Americans will need--and it's not cheap. Then there's the uncertainty principle: you never know for sure if you'll need such services or what level of service that may be if you do.

Medicare is only going to pay $105 per day of the expenses you incur between the 20th and 120th day of your long term care service. Outside of that, you're on your own (and most of these services will incur expenses of more than $105 per day). And Medicaid is nothing more than welfare--and only those who can legitimately claim to be welfare candidates (a net worth of a paltry $2,000) will receive its unlimited benefit.

The average LTC policy has a pay-out of $150 per day after a 90-day elimination period (they pay nothing for the first 90 days that you need care). Also, while premiums are never scheduled to rise, the right is reserved by the insurance provider to raise them if they need to in order to cover their costs--so you don't have a guarantee (you can get one but your premiums will automatically be higher to start with). Most people also pay for their policy's future pay-out to be adjusted for inflation, so that the $150 of today would automatically be more like $300 in 2030. Policies are different and can give you even more coverage than the average but that requires larger premium payments now.

Generally speaking, that rule of thumb about the people who are technical multimillionaires holds true. But--what if it's extremely important to you to pass on as much of your fortune as possible to your children and your grandchildren? What if a large portion of your net worth is a small business that you own and love and never want to have to sell in order to pay for long term care? Then it matters less if you could pay for it and matters more if you desire to pay for it, should you need it.

Answered at 3:37 PM on February 20, 2009

Read answer

What is Long Term Care Insurance Costs?

Asked by karn singh in Personal Finance & Tax at 2:50 PM on February 20, 2009

Seema's Answer

Long term care insurance is a rapidly evolving form of insurance that is designed to cover all or most of the costs of nursing home care, assisted living facility care, or in-home specialized nursing care. This might seem like a non-issue to many people who aren't yet into their "silver" years. But, here's another trait of all insurance of all types that doesn't change: the greater a risk you pose to requiring the company to pay out, the higher your premiums. In the case of LTCI, that means age and health status at the time of application figure heavily into how much you pay.

The great news is that once you have your policy and are paying your premiums, continued aging and, if it happens to you, deterioration of health don't affect what you pay out in premiums. So, the best thing you can do is buy LTCI when you are young(er) and healthy. For many people, this means buying it between age 50 and 64. But long term care insurance policies through most companies set the minimum age of eligibility at 40, and if you can afford to buy it in your 40s you'll be even farther ahead of the game.

Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance, says "The cost of long-term care insurance is directly linked to interest rates, the anticipated likelihood of claims as well as care costs. When interest rates decline as they have in recent years, insurers need to increase premium costs. And as our society ages, more people will be needing long-term care that becomes more costly each year. People often ask what is the best age to buy long-term care insurance protection and the honest answer: a month or two before a change in your health."

Well, let's say that you don't buy LTCI--for it's not super-cheap no matte how young you are or how healthy you are when you buy it. What might you end up being nailed with later on in life for you savings today? Well, right now, the national average for one year's stay in a nursing home is $77,380--that is, $212 per day. And if you live in an expensive, affluent area of the nation, the cost could well be more than $140,000 per year, or nearly $400 for a single day's stay.

And the average stay-period in a nursing home or assisted living facility for the average elderly person who goes into one is 2.5 years. And there's more: as terrible as it is to think about spending some of your golden sunset years in such a place, the reality is that over 25% of men and over one-third of women do so. And (yes, another and), if we keep on extending our average lifespans, those percentages will increase. In fact, even today, senior citizens in America have a 70% chance of needing some level of long term care.

But things can be even more catastrophic--without the insurance. Consider the real-life case of one man who decided to buy LTCI at one of the earliest possible ages he could: age 42. He paid only about $75 per month in premiums. That "only $75 per month" might seem expensive to some until they learn that nine years later at age 51 he was diagnosed with Early-Onset Parkinson's Disease. Now, assuming he lives until a man's life expectancy age--which right now is 74 years, and which is very realistic for those with EOPD--while he paid out less than $9,000 in premiums his insurance company will pay nearly $2.2 million in benefits to him.

Answered at 3:36 PM on February 20, 2009

Read answer

How to Avoid The 8 Most Common Money Mistakes?

Asked by karn singh in Personal Finance & Tax at 8:23 PM on January 31, 2009

Seema's Answer

Here are the eight most common mistakes made and how to avoid them

Step1
The first most common mistake people make with their money is to pile up their debt. When you pile up debt, you create an enormous financial setback for yourself that is both extremely difficult to get out of and which also costs you more money in the long run through accrued interest. It is extremely important to use your credit cards responsibly. Building good credit can help you qualify for lower interest rates on loans, but charging your cards to the max and not paying them off destroys your credit and puts you deeper into debt. Pay in cash instead to keep spending within your means.
Step2
The second most common mistake people make with their money is not making sure that they are fully covered by their insurance. The financial fallouts caused by emergency insurance situations can be devastating. Be sure you stay fully covered with auto, homeowners (or renters), health care and disability insurance at all times. If you have a family, you should also have life insurance coverage.
Step3
The third most common mistake that people make with their money is to put-off saving and investing. When it comes to saving and investing your money, time can be your best friend. The purpose of saving and investing your money is to take advantage of compound earnings. The longer that you save and the earlier that you start investing the faster you can reach your financial goals. Waiting just makes
it much harder to meet the same goal. So find a way to start saving and investing today.
Step4
The fourth most common mistake that people make with their money is also not setting aside a small amount of money for an emergency fund. In addition to your saving account, you need to set up a small slush found that is only used for emergencies. This will help you to avoid taking money out of your savings and regular checking account when an emergency situation arises. Try to contribute the same amount to his account each month, just as you do with your normal savings account.
Step5
The fifth most common mistake that people make with their money is missing their employer match. An employer match is free money! If your employer offers a 401k plan with a company match, make sure you take full advantage of it. Contribute enough money into your 401k with each paycheck to qualify for the company match - otherwise you are giving away free money.
Step6
The sixth most common mistake that people make with their money is
not setting up automatic payments for savings or investment plans. When you base your investments or savings contributions on the amount of money you have at the end of the month, you will get nowhere fast. Instead, set up an automatic plan that takes money out of every paycheck - and you will be surprised how quickly your accounts will grow on their own.
Step7
The seventh most common mistake that people make with their money is co-signing for loans. The next time a friend or family member asks you to vouch for them on a loan, politely run the other way. When a bank requires a co-signer, it's because the person applying has no credible history of paying debts on time. If the person who received the loan is late on payments or simply doesn't pay up, you'll be responsible - and this will damage your credit.
Step8
The eighth most common mistake that people make with their money is
getting "upside-down" on their car loans. This happens when people purchase and finance new vehicles they can not truly afford. Since new cars depreciate quickly, and your finance term may extend longer than 5 years, you may owe more on the loan than the car is worth — which is called being "upside-down" on the loan. To get the most for your money, put at least 20% down or, better yet, buy used cars and drive it till it dies.

Answered at 8:57 PM on January 31, 2009

Read all answers

What is John Hancock Long Term Care Insurance?

Asked by karn singh in Personal Finance & Tax at 2:49 PM on February 20, 2009

Seema's Answer

Very recently as of the time of this writing, John Hancock qualified to become listed in the Insurance Marketplace Standards Association (IMSA), which is the independent standards-setting and compliance solutions organization for the life insurance, annuity, and long-term care insurance marketplace. John Hancock has to undergo review every three years to re-qualify for membership listing. Companies achieve membership based on their having ethical standards (such as being truthful in their marketing and advertising) as well as delivering product and service quality.

However, John Hancock did recently need to raise its premiums on over 275,000 of its LTC policy holders.

When the long-term care insurance market opened up in the early 1990s, John Hancock sold many policies based on the idea that the policy holders would only keep them for a limited time and then drop them--such as if they had bought a term life insurance product to insure them against the unexpected for a temporary period of time. Some financial professionals recommend that anyone who has a net worth of at least $2 million does not need to maintain a long-term care insurance policy, the premiums on which are high compared to other insurance products (except for health insurance, which many will tell you is not "real" insurance anyway but is actually subsidized medicine) because of the fact that people under 40 cannot qualify for these products (that is, they are by their nature relatively high-risk insurance policies). So, many John Hancock LTC policies were sold with the idea that as their holders continued to work and gather assets, if nothing unexpected or unforeseen happened they would one day be worth at least $2 million and no longer need their policies--meaning, John Hancock would never have to pay any claims on them.

Instead, the vast majority of these clients have chosen to continue with their policies because they don't desire to have to pay out a great deal of money from their own personal fortunes just because they would have the capability of doing so in the even that they needed long-term care. Furthermore, these policy holders decided that they weren't satisfied with paying in all of those premium dollars and then getting nothing in return in the long run. (The analogy with term life insurance isn't strong here because term life is far, far less expensive than LTC.)

Answered at 3:36 PM on February 20, 2009

Read answer

ARP Long Term Care Insurance Policies ?

Asked by karn singh in Personal Finance & Tax at 2:41 PM on February 20, 2009

Seema's Answer

According to ARP, the best type of long term care (LTC) insurance policy, which may cost you thousands of dollars a year based on your age and your health status when you apply for it, is one which:

*It is clearly explained when you will be eligible for coverage
*It is clearly explained just how your eligibility for claims will be determined
*Requites no hospitalization time to make you eligible to start receiving benefits
*Will be automatically renewed for as long as you pay the premiums, and will allow you to stop paying premiums once benefit payout begins.
*Has one "reasonable" elimination period (like a deductible; ARP defines "reasonable" as 90 days) for the life of the policy (having an elimination period keeps your premiums lower)
*Definitely covers pre-existing conditions that were disclosed when you applied
*Gives you options for inflation protection
*Permits you to downgrade your coverage if you can't afford the premiums on your current level of coverage
*Will cover Dementia
*Will pay for not less than one year of nursing care and home health care services
*Gives you the right of recision with no questions asked for a full premium refund during the first 30 days that you have the policy

ARP provides LTC policies which are underwritten by the Metropolitan Life Insurance Company (MetLife). These are considered to be some of the best LTC policies in the business, as MetLife agents are highly trained and MetLife has superior assets and claims paying strength. ARP advises people who are interested in buying the best long-term care insurance policies consult either a professional and licensed insurance agent or a financial planner. If these professionals don't advise you, you run the risk of being tempted into not including some of the most important features such as those listed above because the sales agent will try to sell you on lower premiums. Lowering your premiums at the expense of any of these most important features is not worth it.

Answered at 3:34 PM on February 20, 2009

Read answer

How to Be in Control of Your Daily Money Habits?

Asked by karn singh in Personal Finance & Tax at 8:23 PM on January 31, 2009

Seema's Answer

Review the following suggestions to come up with ways to get a handle on your day to day spending.

Step1
STOP PLAYING THE LOTTERY.
Lotteries are nothing more than a tax on the naive. They are a complete waste of money, and the people who spend the most on them can least afford to do so. You might as well throw that money in the fireplace. At least it will provide you with some heat.
Step2
PUT YOURSELF ON AN ALLOWANCE.
Allowance isn’t just for kids. One of the best ways to get your spending under con troll is to monitor and limit the amount of cash you spend on incidental day to day items, many of which are unnecessary. Figure out how to spend your day to day cash, look at purchased that can be avoided or reduced, and then put yourself on an allowance. Start each Monday with a set amount of money that should last you for a week. If you run out of money before the week is up punish yourself by having to spend the weekend without. Of course you’ll go take out more spending cash, but at least your impulse to excess will be tempered by the realization that you’ve exceeded your preset limit.
Step3
KEEP TRACK OF HOW YOU SPEND YOUR POCKET MONEY.
This happens to many people all the time: They start out with $50 cash on Monday. By Thursday morning they’re out of money. Their first reaction: (Someone stole my money), but the sad fact is they spent much of the money unnecessarily. Keep a record of how you spend your pocket money. It will help curb one of the biggest sources of waste in your financial life. Make it a habit of counting your money in your wallet everyday.
Step4
DON’T CARRY EXCESS CASH
All too often, the extra cash people carry for “emergencies” ends up being spent on unnecessary things. You really don’t need to carry a lot of cash. Keep it in the bank, where it can earn interest.
Step5
CARRY ONLY ONE CREDIT CARD.
It used to be that having a wallet full of credit cards was a sign of the good life. It was nonsense then and it is nonsense now. Most people need one credit card for convenience and identification purposes, but there’s little or nor need to carry more than one credit card. They carry fees, they’re tempting to overuse, and it makes your record keeping more difficult when you have to pay multiple credit card bills each month. Also, it’s a pain having to inform so many credit card companies when you lose your wallet.
Step6
MAINTAINE A SUFFICIENT BALANCE IN YOUR CHECKING ACCOUNT TO AVOID MONTHY FEES.
Chances are your bank will waive its monthly checking account fees if you maintain a sufficient balance in the account. I not, you can certainly find a bank that does. It may seem like a lot to keep up the required balance, but compare that against the fees you’ll otherwise be assessed. Usually you’re far better off keeping the sufficient level to waive the fees than you are by having that money earning interest somewhere.
Step7
RECONCILE YOUR BANK ACCOUNT.
Always know how much money you have in each account. Don’t trust the bank to care the way you care about your money. Always balanced out your check book frequently once a month if you skip one month, do it the next month.
Step8
USE DIRECT DEPOSIT FOR YOUR SALARY CHECK.
Depositing salary checks directly into your bank or credit union accomplishes a couple of things. First, you avoid having to drive or walk to the bank or credit union to deposit the check, which may cost you both time and money. Second, your checking account is credited faster than if you make the deposit yourself; the funds are available faster. While you’re at it, be sure to ask your employer to have a portion of each paycheck automatically deposited into your savings account. Remember, the only way you can financially succeed in this world is to set aside some savings regularly.

Answered at 8:51 PM on January 31, 2009

Read all answers

How to Benefit from a consolidation loan.?

Asked by karn singh in Personal Finance & Tax at 8:24 PM on January 31, 2009

Seema's Answer

Step1
INTEREST BENEFITS: The best benefit of a consolidation loan is that it will make you pay less each month with all of your loans combined. The reason you will pay less is because you will have one low rate instead of several high rates on the money that you owe.
Step2
GATHER YOUR LOAN INFO: Figure out how much money you will need to borrow to pay off all of your loans. Include credit cards, appliance loans, and any other loans that you can include in the consolidation loan.
Step3
CHOOSE A LENDER: Call around to different banks and lenders to find out what types of rates you can get on a consolidation loan. You may have to go fill out an application for them to check your credit score before they will give you a rate. Once you have found the best rate, fill out the paper work, pay off your old loans, and you'll be on your way to cheaper monthly payments.

Answered at 8:50 PM on January 31, 2009

Read all answers

How to Beat Credit Card Debt?

Asked by karn singh in Personal Finance & Tax at 8:24 PM on January 31, 2009

Seema's Answer

If you really want to beat your credit card debt, you most certainly can do it! You simply have to get mad at the credit card companies and follow a strict plan and in no time at all you will beat credit card debt and take control of your financial freedom.

Step1
Have the desire to reduce debt. Your first step is to have a desire to reduce debt. You have to realize that credit cards stinks. The only entity that is making money off the credit cards is the credit card companies. You are not making a penny. In fact, you are suffering big time. You are paying loads of interest to pay for things of the past. You are also at risk of being slapped with higher interest payments if you ever miss a payment on ANY of your cards. Well, this is no way to live folks. By getting a burning desire to reduce debt, you can do it.
Step2
Stop using cards now. Pay cash for everything. Not only will paying cash force you to be smarter with money and your purchases, it will also prevent you from buying things you can't afford. It will force you to live within your means because it hurts to buy stupid stuff when you're using cold-hard cash. In addition, if you only use cash, you are less likely to go over your budget 'cause if the money isn't there - you can’t spend what you don’t have - it's that simple.
Step3
Live below your means. Make a commitment to live below your means. This means cutting out expensive services like cable television, expensive groceries, eating out every day and even buying stuff you can't afford to have. Instead, get on a written spending plan and only buy the things that you have budgeted for. Shop at discount stores instead of local grocery chains and do what you can to cut back. In addition, stop buying impulse items. By following your plan, you will make sacrifices along the way but by doing this, you will squash debt in a bit way.
Step4
Call your creditors now. Stop hiding from your creditors now and call and confront them. Ask them to give you a payoff and confirm your interest rates and terms. Then, tell them about your financial situation and see about working out a plan. Perhaps you can negotiate for lower payments or even ask for a smaller interest rate. Either way, you must contact them now. You may find that they are willing to work with you.
Step5
Use the debt snowball. Make a list of your smallest to lowest debt. You will then pay off the smallest debt first using the debt snowball. With the debt snowball, you pay the minimum payment in addition to an extra debt payment and once that is paid off, you repeat the process with the next payment. Not only will this sharpen your self esteem and confidence it will give you the motivation you need to keep on going.
Step6
Get a part time job or work overtime. See if you can work more hours or pick up an extra job then apply the extra money to your debt snowball. Not only will this help you pay off debt faster but it will encourage you to keep going because you'll see the power of paying stuff off.
Step7
Consider making even more changes in your life. If you have to sell stuff then sell it. Remember another man's junk is someone else's treasure. For instance, you can sell your car and take the bus instead. In fact, by doing this, you will avoid an expensive car note and you'll save a ton of money on gas. You can then use the savings to beat even more credit card debt. Another example is to go to free concerts instead of paying for expensive ones and then applying the funds you would have spent to beating debt.
Step8
In conclusion, you can reduce your credit card debt if you have the desire, stop using credit cards, pay them off using the debt snowball, cut your living expensive, and more. Although you won't beat debt overnight, you will soon find that your debt is shrinking and just when you've changed your life, you'll realize that you've reached financial freedom. You can do it!

Answered at 8:48 PM on January 31, 2009

Read all answers

How to Become a money lender online?

Asked by karn singh in Personal Finance & Tax at 8:24 PM on January 31, 2009

Seema's Answer

Step1
Apply for a free account in lending club website. Fill up the simple application and wait for the email confirmation.
Step2
Set up your banking online and deposit money to your lending club account by transferring your fund electronically, by check, or by PayPal account.
Step3
As you visit this site, you can see the safe seal and the PayPal logo in it that means this is legitimate business and that your money is back up with a bank that is FDIC insured.
Step4
To feel more safe why not check it out for yourself and do not forget to mention my username too "moneystarter". I will not make money if you mention it but it does help you build a connection if ever you will borrow money.
Step5
This website acts like a social networking business by lenders and borrowers. That's why this is called "Lending Club". The more friends you know the more chances you will get money or lend money. Just try it. It's free!

Answered at 8:49 PM on January 31, 2009

Read all answers

How to Benefit from College Loan Consolidation?

Asked by karn singh in Personal Finance & Tax at 8:25 PM on January 31, 2009

Seema's Answer

Step1
Make a better credit score your goal. While you may not be able to control exactly how much your score goes up, you can control what you do to make it go up. Create a text file, entitled "My Credit Score," and record each step you take to better your credit score. For example, record each time you make a bill payment on time, and record each month you successfully keep your credit card under 30% of its credit line. So you know where you stand now, consider requesting your free credit report, and paying the small fee for your credit score.
Step2
Pay your bills on time. Because whether or not debts are paid on time make up 35% of your credit score, you can be certain that each on time payment will better your credit score. While automatic online payments are an option, they may turn out to harm your credit score if you don't have the funds available for the transaction. A better option may be to keep a log with your bills listed in one column, the date you are going to pay the bill in the second, the date the bill is actually due in the next, and the amount due in the last. Check this log every day, and you'll never have to worry about a late payment again.
Step3
Use no more than 30% of your credit line each month. For a better credit score, some people suggest using no more than 10% of your credit line.
Step4
Get a secured credit card. If you can't better your credit score because you don't have good credit and can't get any, then a secured credit card may be the solution. These are different from prepaid cards. Instead of essentially converting your cash into cash with benefits, you're basically loaning yourself your own money in order to build credit. The more money you use to secure your card, the higher your credit line is. Treat this secured credit card as if it were a regular credit card, and you'll build a better credit score fast.
Step5
Don't close a credit card account once it's paid off. Your credit score is partially based on your ratio of debt to credit. If you already have the credit, then you can better your credit score if you don't reduce this ratio by closing the account. If you must close the account to stop yourself from using your credit card, cut the card up and change the password to your account to something you will easily forget.
Step6
Open a new account. If you have little to no credit, you may need to open a few more accounts to prove you're credit-worthy. Get a credit card or bank loan, and make on-time payments on the credit card or loan, and you will certainly better your credit score.
Step7
Check back on your goals. Constantly revise and edit your goals to make sure they're achievable. Reward yourself for your successes. After six months or a year, check your credit report and score again to see how much you've improved your credit score.

Answered at 8:47 PM on January 31, 2009

Read all answers