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I can safely say that the purchase of my LTC insurance was the wisest and most forward-thinking, financial decision of my life. - Mr. LTC

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Who should consider Long Term Care insurance?

Many planners refer to LTC insurance as "asset protection." Individuals need to have assets worth protecting in order to justify the purchase of a policy. (Medicaid eventually pays for Long Term Care services once an individual becomes impoverished).

In other words, if you are able to pay the premiums without having to change your lifestyle – you should transfer that risk to the insurance company.

Health is another important consideration. The state of one’s health is a determining factor in one's ability to secure protection. This sometimes poses a problem as people don't often consider Long Term Care until an unfortunate event has affected their health or the health of a loved one.

In home, or facility care may be required by anyone, not just seniors. Care is usually required as a result of the effects of aging, either because a person has become physically unable to carry out everyday activities or because they experience cognitive impairment, such as Alzheimer's disease. Other times, long-term care may be needed because of chronic disease or while recuperating from an accident or serious illness.

What is Long Term Care Insurance?

Long Term Care Insurance has been around in one form or another since the early days of Medicare. The policies during this time bear little resemblance to today’s policies. While early products were similar to a basic Medicare supplement policy, today Long Term Care insurance has evolved and typically covers a broad range of services including nursing home care, assisted living facilities and adult day care.

Like any coverage, this type allows the insured to pay an affordable premium to protect an unaffordable catastrophic event.

What to look for in a quality policy

Financial Strength
This policy is for the "long-term." It is important to keep this in mind before purchasing from a carrier with inferior financial strength. Many policyholders do not receive benefits for 10 to 20 years after issue.

Adequate Daily Benefit
Proper Care can be expensive. They may easily exceed $130 per day in most parts of the country and in excess of $200/day in metropolitan areas. It is important to be aware of the costs in your area when selecting a daily benefit. Average costs per state can be found on our Free Instant Quote page .

Inflation Protection
Over time, the cost of services increase. Long Term Care services are no different. For example, a nursing home that charges $130/day today will charge $260/day in 14 years assuming a 5% growth rate. Inflation options need to be selected at time of issue, and do not under-estimate the power of compound interest.

Comprehensive Coverage
At the time the policy is issued, we do not have a crystal ball to determine where we will end up receiving services such as nursing home, home care, adult day care, ect. It is comforting to know that you will get benefits in a variety of settings.

Ask your financial representative about their company's claims process. This is the most important aspect of an Long Term Care policy and yet the most ignored. Questions to ask would be as follows:

  • Describe the carriers claims process?
  • What percentage of claims that have been filed are paid?

Stable Premiums
LTC carriers have the right to raise premiums. The policies are "guaranteed renewable" which prevents a carrier from singling out individuals for rate increases, but they may raise premiums for a "class" of policyholders. Be careful of carriers that are priced substantially below the competition. Again, ask your representative if the proposed carrier has ever increased in-force premiums.

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