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Mother’s Day: Insurance Planning

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Medigap, Elderly Services

(credit: Photo by Spencer Platt/Getty Images)

420x316-grad-lee Dee Lee
Dee Lee is a Certified Financial Planner who received a diploma in...
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BOSTON (CBS) – Finding the insurance policies is going to be the just the first step.

Now you need to review them to be sure you have the latest policy and the premiums are paid. It would not surprise me if you found that mom has saved expired policies.

  • Homeowners: If mom owns her home make sure she has a homeowner’s policy. No one requires you to have insurance coverage if you own your home outright. If she is renting be sure she has a renter’s policy. When you and mom did her net worth statement is there anything of value that may need special coverage such as a stamp collection, jewelry or antiques? Is the house insured for the current value? You want to be sure there is enough coverage.
  • Auto Insurance: There is a discount for drivers over 65; how much varies with the insurance company. There is another discount for drivers that don’t put much mileage on their cars. One of the hardest things you will ever discuss with mom is whether she should be still driving.
  • Health Insurance: Medicare is for individuals over age 65 but it does not cover everything. She should also have a Medigap policy, which covers things Medicare does not. There are six Medigap providers in Massachusetts. She will also need Medicare part D for drug coverage. Does mom have insurance from a former employer or was she listed as a dependent on dad’s policy? Here it may take some detective work to be sure she is adequately insured.
  • Life Insurance: As we age life insurance becomes very expensive and our need for life insurance decreases. Life insurance is used to cover the loss of our income stream to our dependents. As we age our dependents grow up and most are able to care for themselves. Some individuals own life insurance to pay for their funeral or to leave an inheritance to the children. Others have life insurance to pay the estate taxes especially if they are gifting real estate to their heirs. If mom has paid up policies check the cash value. You want these policies stored in a safe place.
  • Long Term Care Insurance: I don’t know if she needs LTC. This is a personal life style call. If she can’t afford the premium then she probably doesn’t need it for she will be eligible for Medicaid. If there is a home you want to protect then you and your siblings can buy the long-term care insurance for her. Long-term care insurance premiums are considered a medical deduction for tax purposes. The amount depends on the insured’s age and the premium paid. The average cost of long-term care in the Boston area is over $100,000 a year.
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