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Issue date:
June 12-14, 1998
Take advantage of new cut-rate car insurance
In this column:
 5 routes to lower car insurance rates
Long-term care coverage: Who needs it, and how to find it
 ood news: Auto insurance rates are headed down. Partly a
result of the aging population (as you age, you have fewer traffic
accidents), the drop in rates is also credited to safer cars, low
inflation and the fact that some anti-fraud precautions the industry put
in place a few years ago worked as they were meant to, says Sean Mooney,
economist for the Insurance Information Institute. State Farm, the nation's largest insurer, is lowering rates in 31
states, and Hartford Insurance cut rates 30 percent in California. But
not every insurer is ready to pass its savings along to you. "A lot of companies are nervous," Mooney says. "They're afraid they'll
never get their rates up again." If your insurer doesn't throw you a
bone, it's time to start shopping for a better deal. Start by asking
your current insurer to cut your rate. If it won't comply, pick up the
phone: You're likely to get the best deals from the 800-number
companies, such as Geico and American Express.
5 routes to lower car insurance rates
Jayna Neagle of the Insurance Information Institute suggests: Raise your deductible. Boosting it from $250 to $500 can save you 15-30%.Get a car alarm; save 5-10%.Take a driver improvement course for a discount up to 5%.Get a car with anti-lock brakes and air bags; save 5%.Seek out special rates. Some insurers give discounts to drivers over 50 or those with low annual mileage; others
give students with good grades a 5% discount.
Long-term care coverage: Who needs it, and how to find it
 s
the U.S. population starts to swell with seniors, many people are asking
whether they should buy long-term care insurance, either for themselves
or for aging parents. Many younger people buy this coverage for their
parents to protect their own inheritance, or to protect themselves in
case they must eventually support their parents. More than 120 insurers offer long-term care policies, with annual
premiums from several hundred to several thousand dollars. Your best bet
is to get quotes from at least three companies. Note: Long-term care
makes the most sense for people with a net worth of $100,000 to $1.5
million. Those with less will exhaust their assets and qualify for
Medicaid; those with more can fund their own care. Shop for a policy with a three-year term, says Robert Davis, president
of Long-Term Care Quote, an independent agency in Chandler, Ariz. Two
reasons: Most people who turn out to need long-term care need it for 212
years. And going this route gives you the option -- which many choose --
to transfer assets to qualify for Medicaid. Look for a daily benefit at
least as large as the average daily nursing-home cost in your area and
an elimination period (the time before payment kicks in) of 90 days.
Most people can afford to pay for their own care for three months. And
the price difference between a policy that kicks in on Day 90 and one
that kicks in on Day One can be 30 percent. Finally, look for insurers
rated A or better by Moody's and Standard & Poors. If you want to get three quotes with just one call, Long-Term Care Quote
(1-800-587-3279) will provide them gratis. The company will ask you for
basic information on your age, health and location, then shop 15
top-rated carriers on your behalf. You'll get details on three policies,
including whether the insurers have ever raised premiums. Not every top
insurer is on Long-Term Care Quote's radar; several major players,
including New York Life and Teacher's insurance, don't let independent
agents sell their policies. Still, it's a good start.
Contributing Editor Jean Sherman Chatzky,
a Money Magazine Editor, wrote The Rich and Famous Money Book. She is
seen on NBC's Today Show and MSNBC.
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