Long-Term Care Insurance is Affordable and Effective

Read Time: 4:54
Published: Jan 4th, 2016
Long-Term Care Insurance is Affordable and Effective
Article Updated:April 5th, 2020

A story in the New York Times had the headline, "Long-Term Care Insurance Can Be Costly but Effective." The story hit the mark on many areas. Still, the cost of today's Long-Term Care Insurance policies are actually quite affordable, especially when purchased in your 40s and 50s as part of your retirement planning.

Long-Term Care Insurance is beneficial for people who wish to protect income, retirement savings, and other assets from the expensive costs of long-term care. People are also concerned about the stress and burdens that extended care places on their families. Long-Term Care Insurance reduces the burdens otherwise placed on loved ones when an extended long term health care event occurs. 

LTC Insurance - Helping American Families Every Day

In fact, a report published by the American Association for Long-Term Care Insurance (AALTCI), a national consumer advocacy and education group, reports that in 2019 the major insurance companies paid over $11 billion in claims over $30 million a day. 

These guaranteed tax-free benefits from affordable Long-Term Care policies provide the resources to pay for quality care in the setting you desire without placing a burden on those you love. 

Without these benefits, families would be forced to become caregivers, or they would sell off your savings and investments to pay for care services. Not only would you be using your own money, but if you need for care occurs during a market downturn, they would be selling at a loss. 

As we know, unexpected and unforeseen events like 9/11, the 2008 mortgage and banking crisis and the virus crisis can have a devastating impact on your assets. The guaranteed benefits from a Long-Term Care Insurance policy allows you to safeguard savings no matter what is happening with the markets.

Not "If" but "When" and "How Long"

These long-term care events happen often. The US Department of Health and Human Services says if you reach the age of 65, you have a 70% chance of needing some type of Long-Term Care service before you pass. You can learn more from the HHS website set up for LTC information: longtermcare.acl.gov

Plus, the United Health Foundation reports 1 in 7 Americans today are aged 65 and older. Population growth continues to grow as more people live longer than ever before because of advances in medical science. This adds up to a problem that will impact many people.

The New York Times article quotes Marguerita Cheng, a certified financial planner who runs Blue Ocean Global Wealth in Rockville, Maryland. She said she was glad she recommended Long-Term Care Insurance for her father, who died this year at the age of 82.

"He had bought a policy when he was 68 with a $125 daily benefit with 5 percent simple inflation protection." Last year, his daily care cost $256, but almost all of it was covered because the benefit had increased to $219.75.

Better Start Planning Now for a Future Successful Retirement

Today, most people start looking at Long-Term Care Insurance coverage in their 40's and 50's when they can enjoy lower premiums because of both their age and health. 

Premiums are based in part on your age and health at the time of application. The younger you are when you purchase a policy the lower the premium will be.

For example, a healthy married male, age 54 in Texas, can obtain $4000 a month benefit, with an initial $150,000 pool of money, partnership certified with 3% compound inflation, for about $90 a month.

LTC Insurance is Custom Designed

Long-Term Care Insurance is custom-designed to fit your needs, age, health, and other considerations. The key, according to several Long-Term Care Specialists, is to design a plan to make a catastrophic event manageable.

Most states have partnership programs available that provide dollar-for-dollar asset protection if you have a qualified policy. The Long-Term Care Partnership Program is a collaboration between the state government and insurance companies. Under this partnership, applicants who purchase qualifying Long-Term Care Insurance policies can access Medicaid coverage while retaining assets they would normally be required to spend on their Long Term Health Care. This is referred to as dollar for dollar asset protection or asset disregard.

Plus federal and state tax advantages may be available as well. The LTC NEWS cost of care calculator will show you both the current and future cost of care services where you live but also show you available tax incentives and other essential information. Click here and see the current and future financial impact long-term care will have on you and your family. 

Act in Your 40s or 50s When You Still Enjoy Good Health

The Times article reports that the American Association for Long-Term Care Insurance (www.aaLTCi.org) says unlike health insurance in the Affordable Care Act era, companies can deny Long-Term Care Insurance coverage based on your medical history. 

If you have health situations like diabetes, Parkinson's disease, or a stroke, you may not qualify at all or have very limited options. This is another reason to obtain coverage when you are younger and healthier.

"Unlike car insurance or even most life insurance policies which are pretty easy to compare, Long-Term Care insurance policies can be quite distinctive. Your first decision is finding an expert who understands the differences and works on your behalf to recommend the best coverage for the least cost from a high-quality company," said Jesse Slome, Executive Director of the AALTCI. 

LTC Insurance is Easy and Affordable Income and Asset Protection

Learning the options available in making Long-Term Care Insurance part of your retirement plan may provide peace-of-mind as well as the ability to protect your income and assets. These policies also give you access to your choice of quality care in the setting you desire.

At some point, you will need extended care and either help with everyday living activities or supervision due to memory loss. The unknown is when this will happen and for how long.

About the Author

An LTC News author focusing on long-term care and aging.

Editor's Note

How is the best way to plan for your own longevity? Retirement planning should happen well before you retire. This includes planning for the financial costs and burdens of aging.

Long-Term Care Insurance, for many American families, provides the resources and services to give you control over your own life. You will have a choice of the type and location of your future long-term care needs. This means control and independence.

LTC NEWS Tools Helpful for Research

Understanding you have a risk is the first step. As you get older, the likelihood of requiring long-term care services also increases. The cost of paid care services drains savings and income. Care is not cheap. The cost of long-term care does vary depending on where you live. 

Your research should start by finding the current and future cost of care services. You will then determine how these costs will impact your savings, income, and lifestyle. The LTC NEWS cost of care calculator is a great resource. Click here and find your location.

Find a Qualified Long-Term Care Insurance Specialist

LTC NEWS provides many other resources to help you plan. However, you will need the assistance of a qualified Long-Term Care Insurance specialist to help you design a plan and shop to find the best coverage at the best value. 

This is usually not a financial advisor or general insurance agent. It takes experience and expertise to understand and design Long-Term Care Insurance. These policies are custom designed, but remember premiums can vary over 100% between companies for the exact same coverage. 

This is why you should seek the help of a qualified Long-Term Care Insurance specialist. Find a specialist by clicking here.

Make sure your specialist is actually a specialist. Ask them not only how many years of experience they have, but more importantly, how many people have they helped? 

An actual specialist will have at least 250 living clients with a Long-Term Care Insurance policy. Often, the best specialists have thousands. This means they will understand underwriting and how it differs from each insurance company. 

Long-Term Care Insurance specialists will also understand the federal/state partnership program, which provides additional asset protection. This should mean they know policy design and claims. Knowing how these policies actually get used at the time of claim is very helpful in designing an affordable plan.

Be Ready to Answer Questions

Expect the specialist to ask you numerous questions about your health, family history, and retirement plans. Once they get this information, they will be able to usually give you actual quotes right away. Unless you have unusual health, you shouldn’t have to wait for their recommendations. 

The plans are custom designed, so give your input on the policy design. The next step is to apply and see if you can get approved. Most insurance companies use electronic applications, so the process is quick and easy. Usually, you do not have to pay anything in advance. Once approved, you have time to make adjustments in coverage before you pay your first premium.

Long-Term Care Insurance is easy, affordable, and rate stable income and asset protection. It will also give your family time to be family.


LTC News Contributor James Kelly
James Kelly

Contributor Since
August 21st, 2017

LTC News author focusing on long-term care and aging.

About the Author

LTC News author focusing on long-term care and aging.

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