I read an informative AARP bulletin article by Ellen Stark and thought I’d share it. Below are some of bullet point ideas mentioned in the article.1
1. Traditional Long Term Care Insurance Policies recently have had fewer sales.
Premium increases over the years and fewer insurance carriers still selling traditional long term care policies are among some of the reasons for the decline in the number of new policy sales.
2. Maybe you might not need insurance, but you still DO actually need a plan!
Long Term Care insurance polices can be expensive, which puts coverage out of the reach for many. There are specific individual factors that come into play for each individual situation when making a decision on whether or not to purchase long term care insurance. One choice doesn’t fit everybody the same. You do need to plan ahead regardless. Whether you are planning on buying a long term policy now to help safeguard your retirement savings or if you plan to take on a high risk method by trying to save a lot more money starting now until your older age, to potentially cover likely future expensive Long Term Care expenses on your own. Now is the time to decide to either start putting additional savings away for the future Long Term Care expenses or simply purchase a Long Term Care insurance policy to put the risk on the insurance company’s side.
3. There is a relatively new type of insurance that is called a hybrid type policy.
A newer concept that has been taking off in way of increased sales are hybrid whole life insurance policies that the insured can draw from to pay for Long Term Care expenses. Although more expensive than traditional Long Term Care Insurance, there are several advantages. Such as: premiums never increase, you don’t have a traditional Long Term Care insurance situation where you “Use it or Lose it!” Meaning with a hybrid policy you can use it for Long Term Care expenses, or if the insured passes away then the beneficiaries receive the death benefit, and with many hybrid policies if you decide you want to terminate your policy later on down the road if you never used it, depending the specific policy, you can get back all (or most) of your money that you spent on premiums! Also as an added bonus, generally with a hybrid policy you are more likely to get approved, since underwriting is generally more lenient than a traditional Long Term Care policy.
Click on these 2 web links below for related blog posts on this topic:
- Long Term Care Insurance - Hybrid Advantages
- Brief Comparison of Hybrid vs. Traditional Long Term Care Insurance
4. Traditional stand alone Long Term Care insurance policies are initially less expensive.
However if you want a lower cost effective Long Term Care coverage with less choices, than a traditional Long Term Care insurance policy may be your choice. Keep in mind if you never use the coverage, you don’t have the option of getting any of your money back spent on premiums over the years with this type traditional Long Term Care policy. Also premiums can increase over the years, they are not lock in at a level premium amount, like with a Hybrid policy. Lastly, unlike a Hybrid policy there isn’t any death benefit with a traditional Long Term Care policy if you happen to pass way before using any coverage.
5. Buying a Long Term Care Insurance policy in your 50’s or 60’s can save you a lot!
It is best to start looking in your 50's or early 60's, before premiums increase sharply or you get denied (or at the very best get approved with increased premiums) due to deteriorating health as you get older. Each year you delay purchasing Long Term Care Insurance, it will be more expensive, that is if you can even still get approved! Initial premiums at age 65, for example, are approximately 8 to 10 percent higher than those for new customers who are 64.
As for where to shop, seek out an independent agent who sells policies from multiple companies rather than a single insurer. I am an independent agent, so no need to go any further! I can shop around for you to find the type policy you feel suits you the best.
Click on web link below to read the entire article:
https://www.aarp.org/caregiving/financial-legal/info-2018/long-term-care-insurance-fd.html
1. Source: March 2018 AARP Bulletin.
Contact me at (941) 404-5334 to discuss your long term care options and/or get you started on the right track of getting yourself insured.