Insurance Tales: My Cure For Your Insomnia!

“There are worse things in life than death. Have you ever spent an evening with an insurance salesman? ” — Woody Allen

 

My apologies ahead of time for the very dry material I am presenting today. But I’m afraid my hands are tied because of certain housekeeping requirements.

Just like having to ingest a dose of castor oil, the charter that puts forth the rules for this blog, specifically bylaw number 1.7(a)(4-3), states that “a topical post relevant to retirement must be published six times a year.” It also specifies that, “additional such posts numbering no fewer than two, nor greater than four, shall further be written when Mercury is in retrograde.” (see Snakes In The Grass Charter at 1.7 et. seq.).

Man… those are stringent rules. Mercury in retrograde? That’s clearly beyond my pay grade. Well anyway, I am apparently required to produce a serious post on retirement. So today our topic will be about insurance.

And you all thought this venture was simply a whimsical, carefree endeavor, didn’t you? Nope. There are rules to follow, and I certainly get no free passes. Retirement is not just about playing the vinyl version “Nursery Cryme” and looking at old college yearbooks all day.

But before we go any further, I am curious about something: outside of the Little Rascal shorts we all watched on our b&w sets back in the sixties, has anyone born after, oh, say 1948, really ever been given a dose of castor oil from a parent or grandparent? I want to know. And no making up tall tales just to impress us. We can always spot the fakes.

There’s been a heap of insurances changes that have gone in the home front over the last couple of months. Some of them voluntary, at least one involuntary, and another made in the spirit of budgetary constraint. Except in the case of our car insurance switch, nearly all of the changes required a substantial amount of time, energy, and in two instances actual blood.

Before I get into the details, I should preface that it is a goal of mine to always achieve a level of consistency in my relationships with insurance companies, banking institutions, mutual fund companies, etc. Just like a marriage, my goal is to have fidelity and longevity in all of my business dealings. Life is hard enough without creating more work.

However, I’m not the one who keeps changing the terms of such ongoing relations. These companies are either raising their rates or modifying particulars with no (or very little) warning. In some cases they have even morphed into a completely different entity which bears no resemblance to the one with whom I once metaphorically walked down the aisle in wedded bliss. It’s like going to bed with your wife one night and waking up with a completely different woman in the morning. And in the case of my former life insurance company, that woman turned into someone I decidedly did NOT wish to see before 9:00am.

Life Insurance

This is probably the coverage that has caused me the greatest heartburn. About a year ago I wrote about the incredibly frustrating relationship I had with my life insurance company. It is by far my most viewed post on this blog. The number of daily hits to it, along with the countless comments and emails I’ve received from both policy holders and insurance professionals, all validated that I am not alone in suffering from that company’s sloppy business practices. That post also taught me a first-hand lesson about the power of the Internet — write it and they will come.

As she watched me struggle with that policy, Gorgeous nonetheless made a decision that she too wanted coverage. Life insurance in retirement is generally frowned upon because at that point in your life you ostensibly have reached a certain level of security and financial comfort. The house is either completely or nearly paid off, the children have left the nest and are on their own, and your pension, investments, and Social Security payments supposedly will provide a protective cushion for you.

But as we’ve previously discussed, second marriages do sometimes come with a requirement to re-create, or in Gorgeous’ case, establish such cushions for the first time. She never had life insurance, and she does wish for an opportunity to provide something to her daughter in the event that she dies early. Additionally, our “forever home” is still yet to be purchased. So each of us having a life insurance policy offers the other a certain level of security that a future mortgage can be paid off without dipping into savings.

It’s all about being able to sleep at night.

After passing a physical exam that included blood work, Gorgeous bought a term life policy through AARP/New York Life. Her interactions with both the agent and New York Life in particular were so much more positive than what I’ve experienced with my policy.

In relative short order I too decided to take their exam and offer my own blood sample. I thankfully passed with flying colors and immediately commenced divorce proceedings with my former life insurance provider. We now have policies with the same company, which is obviously convenient.

Long Term Care Insurance

I’ve had a policy for long term care since 1999. It is part of a group plan open to federal judiciary workers in the U.S. Court system. I carried the policy into retirement and now pay for my coverage directly to the provider rather than the payroll deduction I previously enjoyed. Throughout my career, I always took care to upgrade to higher levels of daily benefit coverage when those opportunities arose (usually every 4-5 years). I hope to keep this same coverage amount I presently have in the years ahead.

Buying long term care insurance is a very personal  and difficult decision for many people. There are those who feel it’s throwing good money away since it’s a policy that no one ever hopes to enact. And indeed, some people feel that their children and/or extended family are an unofficial and unspoken kind of long term care insurance. I, however, have no children, and my extended family are all spread out around the country. Having this policy is yet another way for me sleep at night.

Of course, I do admit to also having moments when I wonder if just buying an expensive teddy bear would be a more economical solution.

Once again Gorgeous couldn’t just let things be. Nope, if I get to have long term care then she wants it too. Fair is fair.

Or is it? Unfortunately her timing to shop for a policy couldn’t have been worse. Long term care rates have sky-rocketed recently as the number of companies who provide it have become fewer. The laws of supply and demand have made this an expensive venture.

Federal employees and retirees discovered this big time back several months ago when the Federal Long Term Care Insurance Program (a separate plan than the one which covers me) raised its premiums by an average of 83 percent. Part of the reason for that happening is when the Office of Personnel Management (OPM) put out a request for bids last year on behalf of the program, only one company — the John Hancock Life and Health Insurance Co — responded to their call. When all was said and done, policy holders had to make a decision to either absorb the increase, lower to less expensive coverage, or quit the plan completely. These were tough decisions.

My coverage under the federal courts plan also incurred a rate hike, but I was fortunate to only have a 10% rise for my premium.

Gorgeous was not deterred by any of this. After shopping on the open market a bit, she found that the level of coverage offered via the OPM plan was still better than what she was seeing elsewhere. As the wife of a federal retiree, she was deemed eligible for coverage after passing still another medical examination.

At some point soon I expect to see the Red Cross park their bloodmobile in front of our condo demanding that we give them a donation too.

Auto Insurance

Earlier this year I bragged in a post how we were saving money with AARP/Hartford auto insurance rates. However, in August I decided I could do better after receiving their renewal for the next year. They raised the price enough to make me start looking for a better deal (we both have spotless driving records). After shopping around, I decided on GEICO because they offered identical coverage to what we had with Hartford but at a savings of $50 per month. Their policy also includes road service at no extra cost.

So are we through? No more insurance shopping, right? Unfortunately there’s no chance of that.

Next month is the annual open season for choosing a health plan. I’ll once again be studying and comparing plans, checking to see if our doctors are still listed, and trying to squeeze out every savings I can possibly find. I already know that our current provider will cost $60 more a month over what we’ve been paying in 2016. I may keep us in it; I may not. I’ll have to do the research first.

In Jane Bryant Quinn’s excellent book published earlier this year (“How to Make Your Money Last: The Indispensable Retirement Guide“), she makes it clear that when it comes to health insurance — and this includes all those on all Medicare plans too — retirees cannot blindly assume that the coverage and provider you had during the current year will continue in the next. You have to review your same plan during each open season to make absolutely certain it’s still the one for you. If this is too cumbersome or confusing, then get a helpful friend or family member to help! Your health care is too important to not monitor.

I fell asleep four times in the writing of this post. How many times for you while you read it?! Fear not, normal levels of imbecility will return soon in upcoming posts.

Until next time…