What kinds of insurance do I need?

     For starters, you will need health insurance. Everyone needs medical care. Even if you're in good health and you don't get sick a lot, there is no way to anticipate accidents and injuries, and having regular checkups is a crucial part of living a long and healthy life. The cost of medical care is now so high, that one minor accident can send you into debt for years or bankrupt your family.

   














 You might also need life insurance, though not everyone does. For example, if you're healthy and have no dependents, you probably don't need life insurance. But if you have a child, a spouse, a parent or sibling that depends on you financially, you'll want to make sure they're taken care of should anything happen to you. Even if you don't have dependents, you might just want a policy that will at least relieve your relatives of the burden of funeral costs. Now, here's where it gets really morbid - what if you're in an accident and you don't die, but become incapacitated and unable to care for yourself? That can be a huge burden on your family, and even more expensive than funeral costs. That's where long-term care insurance comes in. And if you're lucky enough to live a long, healthy life, long-term care insurance will cover nursing home costs for you when you're elderly, or even pay for your elderly parents' stay.

The advantages and pitfalls of short-term health insurance

Whether you're a college student searching for health coverage to tide you over before you start a new job, or a recently laid-off breadwinner who no longer can afford the COBRA coverage from your old job, you may want to consider exploring a short-term health insurance policy.
Short-term plans offer temporary coverage for a designated period of time (often one month to several months) to pay for things like office visits, diagnostics, inpatient care, emergency services, immunizations and prescription medications.
Often, they are high-deductible plans that would provide coverage for major medical events or emergency care -- but not regular checkups until the deductible is met. After the term of the policy lapses, you must reapply for another term. Companies like Fairmont Specialty and Blue Cross Blue Shield offer various short-term health insurance packages that you can tailor for your needs and budget -- ideally with the help of a credible local agent.
Short-term health policies may present a viable option for:
o Individuals who can't afford COBRA coverage.
o Individuals in a holding period before coverage kicks in at a new employer.
o Seniors nearing retirement who are not yet eligible for Medicare.
o College grads or other young professionals who lack coverage but who plan to find employment soon.
One of the attractive aspects of short-term policies is that they provide stopgap protection at potentially lower rates than COBRA coverage.
A 30-year-old male who doesn't smoke could pay as little as $30 in monthly premiums for a short-term plan with a $5,000 deductible, according to a preliminary online quote from UnitedHealthOne. Fairmont Specialty's short-term medical insurance plan provides a lifetime maximum of $1 million in benefits per policy. This kind of coverage helps consumers hedge against catastrophic medical bills stemming from, for instance, a sudden illness or a motor vehicle accident.
According to Families USA, a nonprofit organization that advocates for health care consumers, family COBRA premiums consume, on average, 84 percent of unemployment benefits. The group says COBRA monthly premiums average $1,069, while monthly unemployment benefits average $1,278. In nine states, COBRA premiums actually exceed (or are equal to) the average benefits that unemployed workers get.
Ron Pollack, executive director of Families USA, summarizes the situation bluntly: "COBRA health coverage is great in theory and lousy in reality … for the vast majority of workers who are laid off, they and their families are likely to join the ranks of the uninsured."
The major downside is that short-term health insurance does not cover those who have pre-existing conditions when they apply -- and does not cover pregnancy-related expenses.
There's also the lack of continuity. If you develop a medical problem or suffer an injury during the term of your coverage, this problem will be treated as a pre-existing condition when you apply for a subsequent term or another kind of insurance.
In other words, say you find a short-term policy that gives you low rates. It seems like a reasonable alternative to COBRA coverage, so you sign up. But during the term of the policy, you develop diabetes. As a result, you must engage in a costly course of therapies and medications. When it comes time to re-up your coverage, your rates almost certainly will skyrocket. Plus, you may not be able to get coverage for this new pre-existing condition.
Furthermore, you may not reapply for short-term coverage indefinitely. For instance, with the Fairmont Specialty insurance plan, people who are 65 or older cannot reapply. Terms, conditions and exclusions for short-term insurance, as with all health insurance, will vary from plan to plan and from consumer to consumer.

Original article:
http://www.insureme.com/health-insurance/advantages-and-pitfalls-short-term-health-insurance

Health Care Reform - Key Features

Key Features of the Law
The health care law offers clear choices for consumers and provides new ways to hold insurance companies accountable. The most important parts of the law are broken into groups below. We’ll highlight new features of the law here as they roll out between now and 2014.

Rights & Protections

The Affordable Care Act puts you – not insurance companies – back in charge of your health care. The following rights and consumer protections are available through the health care law

Insurance Choices

The Affordable Care Act gives you a variety of alternatives to the individual private insurance market.  If you need health insurance, these programs may be available to you.

Insurance Costs

The Affordable Care Act provides you with new ways to hold insurance companies accountable and keep your costs down.  These changes can help you get the most out of your health insurance.

65 or Older

The Affordable Care Act strengthens Medicare, offers eligible seniors a range of preventive services with no cost-sharing, and provides discounts on drugs when in the coverage gap known as the “donut hole.” Learn how the health care law affects people age 65 or older.

Employers

Tax credits and new programs are now available to small businesses. Learn how the law helps make care more affordable for employers, employees, and early retirees

Full text of the Affordable Care Act (PDF)

Read more: http://www.healthcare.gov/law/features/index.html  Key Features of the Law

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5 Questions to Ask About Your 2012 Health Benefits

Many U.S. employers will drop a bunch of health-care options in their workers' laps in the next few weeks, if they haven't already.

If you're one of those workers, unless you change jobs or lose your job, the choices you make will stick with you and possibly your family for all of 2012, so it's important to scrutinize and compare health-plan options.

You may be tempted to automatically re-enroll in the same plan you have now, but that could cost you. Many plans are shifting costs and benefits around and some employers have introduced new ways for workers to save money, experts say.

"If an employee blows off open-enrollment communications, the employee could pay more because they're missing incentives to pay less that are tied to participation in wellness activities," said Eric Parmenter, vice president of consulting for High Roads, a benefit consulting firm in Nashville, Tenn.

For next year, employers generally aren't as interested as they've been in recent years in raising workers' premium contributions, but they're finding other ways to pass on higher health-care costs, said Michael Thompson, principle in human-resource services at PricewaterhouseCoopers in New York.

"There's not as much focus on increasing premiums for workers as much as there is on increasing the amount of cost-sharing workers have at the point of service," he said.

People who use their health plan might feel more of a squeeze than those who don't, said John Asencio, senior vice president of Sibson Consulting, a human-resource consulting firm in New York.

"If you had a $15 copay, you'll probably see those go up to $20, $25 for physician office visits," he said.

The good news is underlying benefit-cost increases are expected to be moderate, compared with earlier in the 2000s when double-digit premium spikes whipsawed employers and employees alike.

Though they still far outpace general inflation and workers' wage gains, health-benefit costs are on track to rise 5.4% on average next year, the lowest rate of increase in 15 years, according to preliminary survey data from Mercer, a consulting firm in New York. If employers did nothing to manage the cost increase through plan-design changes, the increase would be 7.1%. The overall trend of the past five years has been about 9%, according to Mercer's findings.

Use of health-care services declined last year as people were left with less disposable income in a struggling economy and more workers faced higher out-of-pocket medical costs, said Beth Umland, director of research for health and benefits for Mercer in New York.

"If money is tight and you've got a $1,000 deductible, you might think twice about going to the doctor if you also think you could put it off," she said, noting the average deductible has doubled in the past five years.

Here are five bottom-line questions to consider as you compare your 2012 options:

1. What's new this year? As part of the health-reform law that kicks in more comprehensively in 2014, most employers already extend coverage to workers' adult children up to age 26 even if they're married or in school. And they have to offer free preventive care for a number of services such as colonoscopies and mammograms. For 2012, many employers are offering what are called consumer-driven health plans, which have high deductibles and often attached savings accounts. They're trying to control costs before 2014, when they have to extend coverage to part-time workers putting in at least 30 hours a week, among other anticipated costs, Umland said.

For 2012, the minimum annual deductible required for high-deductible health plans to be coupled with health savings accounts (HSAs) is unchanged at $1,200 for self-only coverage and $2,400 for family coverage. But the annual maximum for workers' out-of-pocket expenses is going up $100 to $6,050 for single coverage and rising $200 to $12,100 for family coverage next year, according to the Internal Revenue Service. Out-of-pocket expenses include deductibles and copays but exclude premiums.

Workers with HSAs for themselves only can contribute up to $3,100 to their accounts in 2012 compared with up to $6,250 for workers with family coverage in a high-deductible health plan. Those limits are slightly higher than for 2011.

2. What would the plan cost me? If your plan is shifting to coinsurance, where you pay a percentage of the total instead of a flat fee, you may have to think differently. "If you had a $10 or $20 copay, it was easy to understand what it was going to cost you when you went to the doctor," Thompson said. "If the plan now has coinsurance and a deductible, that visit may cost over $100 if you haven't met your deductible."

In making a total estimate of what a plan might cost you, first take stock of the premiums, the amount you contribute each month out of your paycheck, which will likely be higher for more a comprehensive benefit plan than for a bare-bones one. The second part relates to your out of pocket costs. For this, consider your recent history of health services. If you see a doctor or need blood work drawn frequently, for example, your copay or coinsurance amounts could make a big difference in your overall spending projections.

Next, if you're considering a health plan with a savings account such as an HSA, factor in what, if anything, your employer contributes to that account that may offset your costs. Your monthly premiums will likely be lower, but don't forget unpredictable and intangible costs. "How much am I saving for sure vs. how much might I lose if I actually use the plan?," Umland suggested asking. Plus, are you OK with managing another financial account? Try to find out how many extra administrative tasks you may need to do to use the HSA funds. Some offer debit cards you can swipe, but others may force you to submit and track claims for reimbursement.

3. What happens if I get really sick or injured? Try to run a worst-case health scenario under each of the plan options to see how financially exposed you would be among them should you or one of your covered dependents have a grave accident or illness. Know what expenses are counted in the out of pocket maximums. "How much would I be out of pocket in this option vs. this option if I suddenly need $50,000 worth of care?" Asencio said.

4. Are my meds covered? If you're on maintenance medication for a chronic illness, check to see if any plans will waive your copay or coinsurance on certain prescription drugs, making them effectively free to encourage you to keep taking them, Thompson said. You may have to talk to a health coach or participate in a disease-management program to get the free meds, but more employers are trying this option to get a handle on their long-term health costs. Some plans also offer a separate out of pocket maximum for prescription drugs, he said.

5. Am I leaving money on the table by failing to participate in wellness programs aimed at making or keeping me healthy? Whether it's a game-oriented workplace exercise competition, private dietary counseling, talking to a health coach or taking classes to help you quit smoking, you may not be able to afford to ignore your employer's 2012 wellness offerings. "While these programs have been around for a while, employers are really taking them seriously now as a way to manage costs," Umland said.

You may not have to do much work to score a break on your health-care costs. In fact, some employees may end up paying $25 to $50 more in premiums per month or hundreds of dollars more in deductibles if they don't complete a health risk assessment or other activities meant to gauge their general health status, Asencio said. "Companies are getting more aggressive around these issues."

[Credited] - Original source: http://finance.yahoo.com/news/5-questions-ask-2012-health-070000424.html

Kristen Gerencher is a reporter for MarketWatch in San Francisco.

The Rising Price of Retirement

As more people work part-time rather than hit the greens, the formula for how much they need to live on is changing. Their tax rate may not fall, and expenses may be higher than planned.

Mention the word "retirement," and most people shudder. The term seems synonymous these days with the phrase, "you can't afford it." More than half of workers in the 2011 Retirement Confidence Survey by the Employee Benefits Research Institute say the total value of their household's savings and investments, excluding the value of their home and any defined benefit plans, is less than $25,000. Housing wealth has vaporized for many households. More than 27 percent of all residential properties with a mortgage—13.4 million homeowners—had negative-equity or near-negative-equity mortgages at the end of 2010, according to CoreLogic, an information and analytics firm.

Times remain tough even though the stock market is up 97 percent from its March 2009 low and the economy is gathering steam. The government's broadest measure of unemployment, and underemployment, is at 15.7 percent, and household budgets are being squeezed by rising food and oil prices—not to mention miniscule yields on savings. It all reinforces the fact that one must confront huge areas of uncertainty when planning for the last stage of life. The answer to the question "how much will you need?" depends on a series of imponderables, from the timing of your death to your health in old age.

Nevertheless, the pervasive gloom about retirement is overdone. Fact is, people are quite creative at coming up with solutions. Case in point: An aging generation isn't really retiring, at least not in the traditional sense of the word. (Think golf.) They may say goodbye to their employer and colleagues for the last time, but they're continuing to work, usually part-time. (Think consulting.) Call it the partial retirement or the job-tirement. It allows savings to compound longer. Delaying taking Social Security benefits locks in a more generous payout. "People aren't slowing down in their 60s and 70s," says Ross Levin, a certified financial planner (CFP) and president of Accredited Investors in Edina, Minn. Adds Joel Larsen, a CFP with Navion Financial Advisors in Davis, Calif.: "If you really like what you're doing, why retire?"

WHEN INCOME REPLACES SAVINGS

Just ask Don Lambert, age 67. The engineering manager retired from Fisher Controls (now Emerson Process Management, a division of Emerson) in 2002. He spent 32 years with the company, half of it abroad, mostly working on projects in the Middle East and Africa. He lives in Ames, Iowa, and when he retired he set up a consulting firm with Fisher as a client. He spent two years on contract with Fisher in Saudi Arabia, where the only thing he had to pay for out of pocket was his "newspaper and haircuts." He still works about two days a week and spends the rest of his time doing community volunteer work with the Rotary International, Meals on Wheels, and the Iowa Council for International Understanding. Lambert has a defined benefit pension plan, Social Security, savings, and no debt. He takes out roughly 3 percent of his savings a year. "I don't need to draw on a lot of my savings yet," he says.

The twin benefit from a higher Social Security benefit and returns that have compounded longer is striking. The Social Security payout rises 8 percent a year for every year of delay after age 62 and before age 70. Laurence Kotlikoff, finance professor at Boston University and head of ESPlanner, an online financial planning website, ran a simulation. Among the key assumptions: A couple is 60 years old, each earns $100,000, and they have a total retirement portfolio worth $2 million. If they elect to take Social Security at age 62 in 2013, they draw on enough of their savings for a total income averaging around $140,000 for the next 38 years. That means they can maintain their standard of living at 70 percent of preretirement income.

Yet if the same couple shifts to part-time work in 2013, making $30,000 each for four years, draws on their 401(k)s, and waits until age 70 to file for Social Security, their discretionary spending jumps by 14 percent, to nearly $160,000 over the next four decades. "To get the same living-standard-hike, the couple would need to find $455,000 lying on the street," says Kotlikoff.

UNDERMINING OLD RULES OF THUMB

But (you knew the "but" was coming, didn't you?) working longer complicates everyday money management by upending a few critical and common assumptions. A traditional benchmark is that in order for households to maintain their standard of living in retirement, they need approximately 70 percent of preretirement income. The lower figure comes from the assumption that a retiree will drop into a lower tax bracket, have more time to shop for deals, and won't incur many expenses associated with work. For instance, economists Mark Aguir of the Federal Reserve Bank of Boston and Erik Hurst of the University of Chicago delved into household data on food gathered by the U.S. Agriculture Dept. from the late '80s and early-to-mid '90s. They found spending on food fell 17 percent among retired households while the time spent making meals rose by 53 percent. There was no real difference between eating out at table-service restaurants for those aged 60 to 62 (pre-peak retirement) and those 66 to 68 (post-peak retirement), except that the retired household spent 31 percent less on fast food and diners.

The old rule is obsolete for the partially retired. The retiree's tax bracket may not drop. The dry cleaning bill will probably stay the same. They're busy and just as likely to grab a burger before a meeting or stop for a takeout meal on the way home as they did before retirement. "I don't think the 70 percent rule applies," says Moshe Milesky, finance professor at York University in Canada and a wealth management and retirement expert. "It may be higher than that."

The other big change is that an aging, income-earning household needs to save from every paycheck, just like their younger co-workers. After all, the cost of goods and services used by the elderly is going up. True, over the past 12 months the consumer price index is up a mere 2.1 percent. Yet that average masks some critical differences. Fuel oil is up 27.1 percent and medical services 3 percent over the same period—a big blow to the budgets of the elderly—while the price of personal computers is down by 7.4 percent, which may be a boon to younger folks. Mutual fund giant Fidelity estimates a 65-year-old couple retiring in 2011 will need $230,000 to pay for medical expenses throughout retirement (and that does not include nursing-home care). "Every single one of our friends has had some serious financial surprise during retirement that was completely unseen," says Henry "Bud" Hebeler, the former president of Boeing Aerospace. His own "retirement" turned into a career offering retirement and financial-planning advice at his website, Analyzenow.com.

Hebeler has devised his own formula for how much to save in retirement while working. He recommends taking your monthly take-home pay, after all deductions and taxes; multiply it by the number of years you will still work, and divide that figure by the number of years it's possible you have to live. For example, say a 65-year-old plans on working another 10 years, expects to live to 95, and makes $2,100 a month after deductions for Social Security, Medicare, union dues, and the like. The monthly amount she can spend from that paycheck would be $700 (2,100 x 10/30 = $700). The remaining $1,400 should go right into savings. Clearly, this isn't our parent's retirement.

Best Bets for Whole Life Insurance

Make sure you buy from a reputable company when you need coverage to last a lifetime. In the June issue of Kiplinger's Personal Finance magazine, Kim Lankford writes that fifty- and sixtysomethings should consider buying permanent life insurance rather than term life insurance if they still need coverage. A permanent cash-value policy, such as whole life, provides a safe place for savings, portfolio diversification, an instant line of credit and tax-free money to pay expenses after your death.
If you're buying whole life insurance, you're looking for coverage for the rest of your life. So you want to make sure you get a policy from a company that will be around for a while. 
For whole life, a mutual company is usually your best bet. As a policyholder, or member, of a mutual, your cash value earns dividends because you “participate” in the company’s investment gains and skill (or luck) in selecting risks. The big mutual companies, such as Guardian, MassMutual, New York Life and Northwestern Mutual, specialize in whole life insurance and have top credit ratings. Some former mutuals, such as MetLife and Prudential, still sell dividend-paying policies by setting aside a special reserve to pay dividends. As with any other investment, past performance is no guarantee of future results. But the way that many people compare insurance offerings -- by looking at hypothetical projections of cash values ten, 20 and 30 years ahead -- doesn’t make sense because these projections (known as illustrations) are not guaranteed. Insurers have been known to issue inflated illustrations based on impossibly optimistic projections -- and fail to deliver. Roger Blease, a pioneering insurance analyst who runs Blease Research, in Easton, Pa., says a better idea is to go back and look at similar whole life policies from different insurers to see how the total premiums paid have translated into today’s accumulated cash values. (He assumes the dividends are reinvested.)
Here are Blease’s rankings of national companies over the past 20 years, with the annual rates of return for a policy sold in 1991 to a man who was 55 years old that year: --Northwestern Mutual, 4.44% --New York Life, 3.37% --Thrivent, 3.20% --MassMutual, 3.01% --The Guardian, 2.62%

Health insurance: Two other numbers to look at

Most people, of course, have almost no control over their health insurance:  They get what their employer provides (if they have a good job) or else they get nothing.  Whether they pick their own policy or not, the first two numbers everyone looks at are thepremium and the deductible.  Well, here are two other numbers that are at least as important.

The premium and the deductible, of course, are very important–those are the numbers that determine whether you can afford thepolicy and when it starts paying something if you get sick.

If you think of your insurance as being a sort-of prepaid medical package–you pay a monthly premium and they provide whatever care you need–then the deductible (and the co-pays) are what matter.  If you think of it as insurance though, there are two other numbers to pay close attention to:  the out-of-pocket maximum and the policy limit.

The out-of-pocket maximum

Even after you pay your deductible, your insurance only pays a percentage of your bill.  (It used to be universally 80%.  Now you often see 90% for in-network coverage and 50% for out-of-network coverage, but in policies that you buy yourself, just about any numbers can show up.)

This is all well and good as long as you don’t get seriously ill or have a bad accident.  If you do, though, even 10% of your medical care can add up fast.  An extended stay in the hospital–even a short stay in intensive care–can reach hundreds of thousands of dollars.  If that happens, your 10% plus co-pays would be in the tens of thousands of dollars–enough to ruin the finances of many households.

That’s what the out-of-pocket maximum is all about.  Once your share of the charges hits the maximum, the insurance should pay the rest.

The out-of-pocket maximum is the single most important number in determining if your insuranceis really insurance.  If your finances are such that you could pay the maximum without going bankrupt, then your insurance policy is about the size you need.  If they aren’t, then you don’t really have insurance at all–you’ve got one of those increasingly common pre-paid medical packages.  (And you’ve got a bad one–one that leaves you vulnerable to ordinary bad luck ruining your finances along with your health.)

One other thing to be aware of regarding the out-of-pocket maximum is that it often doesn’t apply to out-of-network coverage:  you not only have to pay 50% instead of 10%, but the amount you pay may not count toward the limit, leaving you on the hook for virtually unlimited expenses.

The policy limit

Just like any insurance, medical insurance has a policy limit–the most they’ll pay.  When I got my first job, $1 million was common.  Nowadays I see a lot of policies with $3 million or $5 million limits (although I’ve also seen policies with limits of just $300,000).

A policy limit is necessary for the insurance company in order to be able to calculate how much they’re on the hook for–without that information, they have no idea what premium to charge.

The policy limit doesn’t come into play very often.  Usually, insurance companies will aggressively deny coverage for expensive stuff right from the start–long before they even approach the policy limit.  But it’s always possible to argue about coverage for procedures that the insurance company doesn’t want to pay for–you have access to appeals, arbitration, lawsuits.  In the extreme, it’s even possible to get the legislature involved, passing laws that require insurance companies to pay for certain things.  That’s not true about the policy limit.  Just like with other kinds of insurance, once you hit the policy limit, the insurance company has no obligation to pay any more money.

If your health insurance is to be real insurance–the kind that protects your finances from being ruined by bad luck–then you’ll want to pay special attention to the out-of-pocket maximum and the policy limit.  Appropriate amounts for those values will matter far more than the deductibles, co-pays, or even the premiums.

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Do You Need Long-Term Care Insurance?

According to the Department of Health and Human Services, those of uswho reach age 65 will have a 40% chance of entering a nursing home, and 10% will stay in one for five years or more. So does this mean you need long-term care insurance? Possibly.
Those numbers don't take into account the millions of aging adults who will need some kind of in-home care as their health falters. By 2020, 12 million older Americans will need long-term care, according to one government estimate. Most will be cared for at home by family members.

Long-term insurance is marketed as a way to fill in the financial gaps if you have a chronic illness or disability and need help with the activities of daily life, like bathing and getting dressed.

"The additional expense of long-term [care] can be $40,000-$90,000 a year," says Rich Arzaga, founder of Cornerstone Wealth Management. "The average American cannot survive this risk and expense." Nor can you count on the government to bail you out when the time comes: Medicare doesn't pay for "custodial care." Medicare pays only for medically necessary, skilled nursing facility or home health care. It may not give you the choice of the best care in your area. And while Medicaid pays for certain types of care for the low-income elderly, who is eligible and what services are covered varies from state to state, and is determined by such things as income and personal resources.

"Many folks wrongly believe that letting the government pay for their anticipated long-term care needs is the best solution, but Medicaid programs are in trouble funding-wise in every state," says Wilma Anderson, a registered financial consultant. "In the future Medicaid may become even harder to qualify for. If you don't plan for LTC, you may have limited or no choices to pay for care when your health changes."

Here are four things to consider when planning for long-term care:

How will you pay the bills?: Many financial planners and elder care experts say long term care insurance is a good place to start. It typically helps pay for things that your medical insurance won't, like in-home care, or remodeling your home so you can stay in it longer. But as with all forms of insurance, it's vital do your research.

Investigate the cost of a stand-alone long-term care policy: The younger you are, the lower the premium will be. The cost really depends on factors like family health history, age, how much insurance you think you'll need, how long you'll need it, where care is received, and more, explains Marion Somers, PhD, author of Elder Care Made Easier: Doctor Marion's 10 Steps to Help You Care for an Aging Loved One.

Shop around for the best policies and prices. Benefits vary: Weigh the scope of coverage, benefit and waiting periods, inflation protection and other factors against your income and health needs.

Read the fine print: "Insurance companies may try to offer added-value features beyond the basic benefits, but most of them don't add much value at all. Be thoughtful and realistic about your needs and priorities," says Ryan Malone, founder of InsideElderCare.com.

Truthfully, says Somers, "Not everyone needs long-term care insurance, but everyone needs a plan."

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AARP Retirement Calculator

Retirement is a goal to be relished, not dreaded. 

Yet for many people, thinking about retirement can be overwhelming. Am I saving enough? When can I afford to stop working? How long will my money last?

Now, the answers are right at your fingertips. Use the AARP Retirement Calculator to plan your financial future so you can retire when — and how — you want. You've got options. This calculator will help you discover what they are.

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Source:  http://www.aarp.org/work/retirement-planning/retirement_calculator/

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Got Insurance? Enough? You Sure?

Many U.S. homeowners haven't insured their homes against earthquakes and other disasters, but the devastating losses in the wake of the recent earthquake and tsunami in Japan may cause people to give their insurance policies another look.

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Earthquakes have occurred in 39 states since 1900, according to the Insurance Information Institute, a nonprofit supported by the insurance industry. Earthquakes have caused damage in all 50 states, according to the group.

April 18 marks the 105th anniversary of the great San Francisco quake of 1906. That temblor caused an estimated $524 million in property loss at the time; it would have cost $96 billion had it occurred in 2009, according to AIR Worldwide, a provider of risk modeling software and consulting services. With a standard homeowners policy, you're not covered for damage to your home or possessions in the event of an earthquake, meaning the damage occurring from the shaking and cracking. Flood damage also is typically not included in your basic policy, says Scott Spencer, world-wide appraisal and loss-prevention manager at Chubb Personal Insurance. To be covered for both, you have to buy an endorsement or separate policy. "Most people are not adequately insured for a total loss, but total losses are so rare," says Amy Bach, executive director of United Policyholders, a nonprofit advocate for insurance consumers. But, "if you lose the bet and something really bad happens, it can be pretty awful to not have the coverage you thought you had." Even in California, only 12% of residents have earthquake coverage. That's partly because earthquake coverage in high-risk areas can be prohibitively expensive, Ms. Bach says. While people pay in the range of $500 to $2,000 a year for basic homeowners insurance, the total cost of insuring an older home in San Francisco with earthquake insurance, for example, can cost an additional $2,000 to $5,000, Ms. Bach says. The cost of coverage varies based on where in the country you live and how old the home is, since newer building codes often make structures more resilient, according to Pete Moraga, spokesman for the Insurance Information Network of California, a nonprofit aimed at educating consumers. Get a Fast Approval on the cash you need this Season. California isn't the only part of the country where earthquakes pose a risk. For example, earlier this year, a 4.7 magnitude earthquake occurred in Arkansas -- the most severe quake the state experienced in 35 years, according to the Insurance Information Institute. Flood insurance is typically less cost-prohibitive to those who need it. To protect a home against flood damage, recognize the area's flood history and know if your home is in a flood zone, Mr. Spencer says. Earthquake insurance is available through private insurance companies, as an add-on. In California, it's available through the California Earthquake Authority, says Jeanne M. Salvatore, senior vice president of public affairs for the Insurance Information Institute. Flood insurance is made available through the National Flood Insurance Program as well as private insurance companies. On the other hand, wind damage caused to a home by a tornado is generally covered through your standard homeowners insurance, Ms. Salvatore says. The tornado season runs from April through July, but some of the most severe storms hit in the spring, according to theInsurance Information Institute. And in most states, wind damage due to a hurricane is also covered in the standard contract, Mr. Spencer says. That said, some policies in certain states exclude wind coverage -- though that practice isn't typical. "Wind deductibles are more common than policies excluding wind all together," he says, adding that the policies require homeowners to pay either a percentage or a flat dollar amount for losses due to wind-related damage. So it's worth checking to make sure your policy will adequately cover any losses. Insurance is determined based on what it would cost to rebuild your home, not its market value -- and the cost of construction has gone up in recent years. The replacement value of your home may have been $250,000 when you bought it 10 years ago, but it might cost $500,000 to build it today. Coverage should be re-evaluated regularly, Mr. Spencer says. To protect against increased construction costs, homeowners can add extended replacement-cost coverage to their basic policies, Ms. Bach says.

She also recommends buying building-code upgrade coverage, which ensures that if the codes have changed and you need to rebuild, the insurance company pays for the increased costs. When you add these items, Ms. Bach says, raise your deductible to at least $1,000 to keep your premium affordable. Get the NEW Android Powered LG Optimus Q! Finally, research insurers, selecting one that offers a good quality of coverage -- not just the lowest price, Mr. Spencer says. 

[caption id="" align="alignnone" width="200" caption="Source: Wikipedia"] "Many people think insurance is insurance and you buy a policy and they're all the same," he says. "But the offerings are as vast as cars. You can buy a Dodge Neon or a Cadillac Escalade.
 

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