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Long Term Care Insurance: Do You Need It?

We are often asked about the necessity of Long Term Care insurance, especially when our insureds are dealing with transition for a loved one. The move to a higher level of medical attention is something that can have a devastating impact on a family's financial situation. We would love to help! Call our office to speak with an expert in the field. 

  •  Do you really need it?  Wealthier people may decide to forgo insurance and self-insure if they have high enough assets.  On the other end of the spectrum people with limited assets shouldn’t purchase long term care coverage if the premiums aren’t well within their budget.  If you don’t think you will be able to pay for it indefinitely, you shouldn’t buy it.  Most people fall  somewhere in the middle.  They can afford to pay part of the long term care costs out of their pocket but also could benefit from having a policy that can fill in the gaps.   
  • Are all policies that same?  No!  Some cover only nursing homes.  Some cover in homecare.  Some have inflation guards.  Some policies make you submit receipts to be reimbursed.  Some issue you a monthly check once a doctor certifies you as needing the care.  Make sure you know what you are buying.
  • Are all companies the same?  NO!  The long term care market has changed a lot.  Decades ago it seemed as if all the major insurance companies were developing long term care products.  Today the market as shrunk because many companies did not price their product appropriately and have had to increase their rates substantial.   Ask the tough questions:  “Has your company increased rates in the past?  If so, how often and by what percentage?”
  • Cut the cost.  Go with a longer elimination period (deductible).    Consider a shorter benefit period.  Yes, having a policy for 10 years is great but the reality is most will never need the coverage for 10 years.
  • Buy early.  Most people wait until their mid to late 60’s buy the coverage.  Two issues:  a.  The cost is much higher.  b.  The chance of being turned down for coverage is much greater.   The ideal age to purchase a policy  is in your mid 50’s.
  • Life insurance rider.  Long term care policies with a life insurance component are expensive but guarantee payment—either a death benefit or long term care benefit.  You never have to worry about throwing away your money.  Some even have an annuity component to them.