Increase protection against common challenges Mike Wells: Increase insurance coverage to protect yourself and your family against common challenges

Part of the value of the law is to help citizens avoid many legal problems. The best legal problems are the ones which never happen.

Here are two of the major challenges - and affordable steps to avoid the long-term financial impact on your family because of them.

Long-term care insurance

Several of us are going to deal with debilitating health care challenges if we live long enough. We may need health care in our home, or we may be in a long-term care or nursing-home facility. Each option is expensive. How will you and your family afford these costs?

If you move into an assisted-living or nursing-home facility, or you receive expanded health care in your home, your significant monthly costs are not going to be covered long term by your health insurance, including Medicare. You should seriously consider purchasing a long-term care insurance policy.

As you near your mid-to-late 50s, among the most important coverages a long-term care policy should contain are coverages for three to five years, and for nursing-home care, assisted living and home care. Also, the insuring company of choice should have a solid financial rating. That is, does it have deep pockets?

The companies that write the bulk of these policies now have more accurately projected their costs, despite some past large premium increases, so there is much less of an increase in premiums year to year. For many years, companies could not accurately project their overall exposure, which resulted in dramatic increases in premiums from year to year, and some companies got out of this market altogether.

Also, some preferred companies may have options to convert your life-insurance policies or other coverages in cost-efficient ways - a growing trend.

Without sufficient assets or insurance coverage, your children will have to bear the high monthly expense of a facility, as some levels of care do not qualify for any public assistance. Families sometimes must consider other elder-planning options in one's latter years, which can get expensive, without solid long-term care insurance coverage. And your time window and choices narrow over time. So, plan on this key approaching expense while your health is good, and you can qualify for this insurance.

Can the premiums for a long-term care insurance policy get expensive? Yes, they can. But with long-term care expenses in a nursing home sometimes exceeding $12,000 a month, paying the premiums beats the alternative.

Under-insurance motor vehicle insurance

Another common risk families face is they are in a motor vehicle wreck that's not their fault, and the at-fault party has little or no liability insurance.

Some statistics suggest that 80% of the wrecks on our highways that result in significant personal injuries (as opposed to property damage only to your vehicle) are caused by 10-15% of the drivers. Any number of people have legitimate damage claims that well exceed the negligent party's coverage. Moreover, the chances that the injured person can collect on a judgment from the negligent party are often slim to none, which injured citizens are often shocked to learn.

Consider purchasing a healthy amount of under-insurance coverage so there is adequate insurance to protect you if the at-fault party has inadequate liability coverage.

Ways to reduce some of the overall insurance costs

How do you pay for the extra coverages? Look at your standard deductibles on various coverages. You can increase the size of your deductibles which are often unused. Talk to your insurance carrier and review your insurance charges and see where you might save. You may be surprised at how those savings in coverages not used may be larger than you expect. The dollars saved are not going to be as much as these increased coverages recommended, but your dollars spent for coverages are going to be more cost-efficient.

Remember: An informed choice is a smart choice.

Mike Wells is a partner with Wells Law, PLLC in Winston-Salem. Contact him at [email protected] or 336-283-8700.