Dilemma: Buying Long Term Care Insurance

An article came out this week that – for once – I actually thought was fair handed and had useful information about this tricky business of researching and buying long term care insurance.  You can see the entire article here on the online version of Wall Street Journal:  http://online.wsj.com/news/articles/SB10001424052702304756104579449482245063704

In short, though, it said the horns of the dilemma are not going to go away:  you will get older, you will become more frail, and 70% of us will need long term care services before we pass away.  So the 4 key points they recommend?

  • Don’t’ wait too long to buy – pricing and health work against you as you age
  • Don’t buy on price alone – be sure you are getting a good carrier that has a good track record in the industry.
  • Couples should consider “shared” policies as a way to hedge their bets – you can get access to bigger policy in the event of some calamitous event…but you aren’t paying bigger policy pricing.
  • Don’t forget the problem of inflation – most folks with a 15 year (or more) horizon to needing long term care services should invest in an inflation rider that will grow the payout.
  • Consider the new “hybrid” policies built on a life insurance chassis – they may not be cheaper, but they do get you a possibility of win/win.

All in all these are great points.  I would add only one more:  work with an experienced long term care insurance broker or agent.  Always ask how many policies the person sells each year.   Experienced persons sell one a week or more.  These folks have their noses deep into the industry – they are keeping up with the changes and generally have a better idea of how your health will come thru underwriting.  In short, you are more likely to get better advice and more accurate pricing if you work with someone who specializes in long term care insurance.


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