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Traditional Long-Term Care Insurance - A Use it or Lose it Proposition

The Real Truth About Long Term Care Insurance – A Use It Or Lose It Proposition

Long Term Care Insurance seems to be a logical solution and yet as I pointed out earlier, only 5% of adults have coverage. Why only so few? The answers make sense:

1) Long Term Care insurance is expensive. A couple aged 65 could spend over $6,000 per year in premium for a 5 year, $5,000 a month LTC benefit with a 90 day wait. Add a 5% inflation rider and they can end up paying over $10,000!

2) Existing LTC plans have recently experienced significant rate increases. John Hancock for example recently increased their premiums in some states as high as 40%!

3) Paying premiums in a Long Term Care Insurance policy is a use it or lose it proposition. If you are fortunate and dodge the LTC bullet and are not among the 70% of seniors that experience a long term medical event, the carrier doesn’t send the premium you’ve paid through the years back to your beneficiaries. To the contrary they are relieved that you passed away before they had to pay.

4) Few qualify. It is reported that only 25% of those that currently make an application for Long Term Care insurance are approved.

5) Many feel invincible, confident that they will never experience a long term medical event. It will happen to “the other guy,” they boast. Statistics say otherwise. It is always better to be prepared than to be sorry; for “the other guy” might be you.

For almost three decades traditional Long Term Care insurance or self funding have been our only alternatives when we consider taking care of this inevitability on our own…..THAT IS UNTIL NOW.

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