Points to consider when purchasing Long Term Care Insurance.  Today's culture offers some very harsh realities of disturbing consequences for those that delay proactive care with this possible area of financial risk. This area of financial risk today is commonly called the financial quicksand abyss that can devour your assets leaving you penniless as you age in life.  Most people today do not understand the realities of this financial risk and are thus unprepared to face this challenge that can undermine and destroy all other well designed plans they may have put in place. 

1. WEIGH BENEFITS AGAINST COST! Be sure you understand the benefit and its cost. Ask yourself if the benefit justifies the cost.  Some benefits are nice but can add a lot to the policy. Start with the basics and then review other benefits and their costs for justification. Ask questions to be sure you understand the benefits and additions that are not part of the basic plan. Many times, an agent will emphasize less important benefits that are not in a competitor’s policy, even though the competitor’s premium is far less for the same major policy benefits.
2. LONGER ELIMINATION PERIODS! A zero day elimination period makes the premium approximately 30% higher than a ninety day elimination period, and a thirty day elimination period is approximately 15% higher. Most people can afford to pay the first one hundred days, and Medicare, HMO’s and Supplements may cover all or part of these expenses. It works just like an auto insurance policy deductible…the larger the deductible, the lower the premium will be.
3. LONGER BENEFIT PERIODS! Cover the catastrophic need. Lifetime coverage is most desirable, since you will not outlive the benefits. Although it does not happen often, a long term care need can last for over ten years. An average long term care need is from three to five years. This allows enough time to plan your estate disposition. Any property you transfer within three years of a Medicaid Application is subject to possible reversal and criminal penalties.
4. AGE CHANGES Some insurance companies use your last birthday, while others use your closest birthday. Birthdays increase the premium anywhere from 4% to 10%, depending on your attained age. By purchasing when you are younger and in good health, you will always pay less premiums, and your coverage will be assured for a longer period of time.

5. THE YOUNGER AGE BENEFIT Most companies that we work with allow new plans to be written from ages 18-84.  The younger ages allow for the added benefits:

  1. A much lower premium.
  2. The ability to have a paid up policy at age 65
  3. The ability to have a paid up policy in 10 years. 
 6. SPOUSAL DISCOUNTS Some insurance companies offer a 30% discount for a husband and wife applying for coverage at the same time.5

7. ASSOCIATIONAL OR GROUP DISCOUNTS Some insurance companies offer a 5% discount for two or more who apply as part of an association or group benefit for coverage at the same time. This can include alumni associations, church associations, and church members. Organizations with members could qualify. Contact us if you have questions or would desire to put in place such a benefit for your organization

8. SIMPLE INTEREST VS. COMPOUND INTEREST Anyone under seventy should give strong consideration to the Cost of Living Adjustment Rider. Our compound cost of living adjustment rider offers 3%,4% and 5% options as well as a two times option. This will allow your benefits to keep pace with inflation. If you are approaching seventy and find the cost of the compound inflation rider prohibitive, purchase somewhat higher benefits than you need today, without the inflation rider, to compensate for future long term care costs.
9. SOMETHING IS BETTER THAN NOTHING If nursing home costs are currently $150 a day in your area, and you can not afford a day plan to cover that, get what fits your budget. It is certainly better to have some coverage than nothing at all. Don’t procrastinate because of premiums. Pick a premium level you can afford and purchase a Long Term Care Insurance plan based on your budget. Review the added benefits, and purchase those that you can afford which have costs that seem justified for the benefit.
10. THE BIGGEST BENEFIT FOR LONG TERM CARE IS PEACE OF MIND. Studies show that the most important reasons people purchase Long Term Care Insurance are to protect assets, and to assure that they will not be dependent on others. Long term care can very quickly destroy what you took a lifetime to build. Long Term Care Insurance can assure you that you will not outlive your resources and can make it possible to leave a financial legacy if that is your choice.  Without long term care coverage that choice is usually not available.
11. POLICY CHANGES  Some companies offer more flexibility then others after the policy is issued.  Allianz seems to offer the most flexibility of any of the companies we deal with.  With the Allianz policy every five years the client is given the opportunity to increase or decrease the elimination period, increase or decrease the daily benefit amount, or increase or decrease the benefit period without proof of insurability, however, the person could not have been on claim or receiving benefits during any of the two year period before a requested change. This offers a proactive way for persons to keep their policy in line with their possible changing risks.

11. LONG TERM CARE INSURANCE IS USUALLY ONLY CONSIDERED WHEN ONE IS NEAR RETIREMENT, BUT IT CAN BE PURCHASED AS YOUNG AS AGE 18, THUS SAVING YOU PREMIUM DOLLARS AND GIVING YOU AN OPTION TO PURCHASE ADDITIONAL BENEFITS AT LOWER COST. EACH YEAR THE TAKE OUT COST INCREASES.

Please be advised that this is not an offer of insurance nor is it a policy but only some generic terms discussed that should be considered as you review this area of possible financial risk.  Benefits vary greatly from company to company and state to state please contact our office and ask to discuss your review with a licensed agent.