Thursday, July 29, 2010

JeffLinks: Good News and Bad

From FoIB Jeff M, two interesting links. The first is good news for folks trying to figure out if they've saved enough to pay for any long term care needs that might arise, and if they might need to be looking at Long Term Care insurance. This interactive tool, from LTCi giant Genworth, includes average costs for nursing care both at home and in a facility, and can even help you determine how much these costs will escalate over time.

Now for some bad, or at least disquieting, news: if you've lost a loved one in the past few years, you know that life insurers no longer just send a check. The default option (in some cases, the only option) is a checking account from which one can withdraw funds.

Actually, that should be "checking account" since it's not a real one:

"Lohman, a public health nurse ... had always believed that her son’s life insurance funds were in a bank insured by the FDIC. That money -- like $28 billion in 1 million death-benefit accounts managed by insurers -- wasn’t actually sitting in a bank.

It was being held in Prudential’s general corporate account, earning investment income for the insurer

And unlike a bank account, this money isn't protected by the FDIC, nor is it even held in a separate, specific account. It's just considered part of the carrier's overall assets.

I always advise my clients (well, technically, their beneficiaries) to immediately cash out that "account" and transfer the money directly to their own real bank account. What they do with the money from there is really none of my business, although I do caution folks not to go on a spending spree right away.

Thanks, Jeff!
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