LONG TERM CARE INSURANCE
A GROWING NEED
The wonders of modern medicine and healthy living are keeping us alive longer, and helping us manage chronic health conditions later in life.
For most of us, there will be a day when we will be either chronically ill, mentally impaired and need custodial care. That day could come sooner than later should you have a stroke, accident, or develop early-onset Alsheimer's or a Demensia. One of the greatest risks you will face financially will be paying for this future care.
Many spend down their hard-earned nest-egg on care after exhausting family caregivers. While your savings can be depleted, the financial cost of providing long term care is only increasing, with no assistance expected from government plans until you are impoverished.
Long term care is most often provided in a home setting, where the spouse or family members provide care as long as possible. Home health care is a service to assist the home caregiver, or replace them at a high price. Some people pay untrained caregivers or family members to provide care, which is unbelievably stressful for all parties concerned. For those needing facility care the setting varies from a Foster care home, Assisted Living facility, a Nursing home or a specialty care facility such as an Alzheimer’s Care Unit.
THE COST IS HIGH
We all know that long term care is expensive: and the cost of care historically has increased about 3-5% each year. With nursing home care currently $60,000-$100,000 per year, a 50 year old should plan on that cost being closer to double that when they reach the time they are most likely to pay for care. So how do you plan for a $100,000-$1,000,000,000 future expense?
Long term care insurance is like an account you pay yearly into to prepare to pay for the high cost of future long term care.
BEGINNING A CONVERSATION
There are many online sources of help for you to learn the basics of long term care insurance. Much of the writers will disagree about specifics, and likely leave you wanting for some skilled clarification.
I believe you should have a low stress way to consider the options as this decision may prove to be an important one should you need to use the policy benefits.
MY LTC COMPANIES:
There are dozens of companies offering LTC insurance. Since you are not likely to use the coverage for 20-30 years, it is important to buy from a company that is financially strong in these difficult financial times. They must have a long history and experience with this kind of insurance, and select a company that is a top 'player' in this field.
In these troubled times, one of the best company today (in my opinion) is United of Omaha, a Mutual of Omaha company. Mutual of Omaha was actually upgraded in 2009 to a 92 Comdex score, while other companies like GE are getting downgraded. Overall, I have selected John Hancock, United of Omaha, & Genworth as my core companies, though I can quote dozens of other carriers though my broker-partners should you have a special situation, like difficulty in qualifying for a plan.
PROCESS OF SELECTING A PLAN:
1. AN INITIAL VISIT OR PHONE CONVERSATION
Here I listen to you and find out medical issues that might affect qualifying, discover the issues that concern you so that I know the direction you are interested in pursuing in coverage.
2. CONSIDER VARIOUS QUOTE OPTIONS
After learning of your desires, I design a plan with various options to choose from. At this time we talk about the fine details, and narrow the coverage down to meet your criteria, and trim it to meet your budget.
3. MAKE APPLICATION:
Once you agree on the exact package, we take the application and 2 months premiums. The process can take from 4-10 weeks to complete as underwriting is slow and deliberate. Usually required is a phone interview, and sometimes the company requests a face-to-face interview and/or a paramedical exam.
4. APPROVE THE POLICY:
Once they approve you, you have a 'free look' period to consider if you approve what they offer. You have full freedom to request a benefit change or back out with a full refund of monies tendered.
SO WHY WORK WITH ME?
1. I have exclusively sold LTC insurance in the past, so I understand the issues and varieties of benefits on this ever-changing marketplace. I commit to listen to you and design a plan best fit the desires you express.
2. I am not beholden to any one company. My goal is to offer personal and competent advice. My LTC broker partner stays up to date with all the company changes and helps me select the policy to recommend which will best meet your future needs.
3. I am not a fly-by-night agent who sells you a policy and disappears. I have been selling insurance for 20 years now as an insurance broker, and plan on remaining a resource to you for decades to come.
4. Finally, my commitment is to always put your needs above my own. This trust factor is less tangible, but important in making a major financial decision.
Call me to set up a no-obligation consultation at 503-650-4325.
Dan Neils
LTC - Frequently Asked Questions
What is long term care insurance?
Long term care insurance is a policy that assists in preserving your assets in the event an extended illness or injury that requires you to pay the high cost of care giving. You are reimbursed for professional services paid for, whether provided in a home, assisted living facility, foster care, or nursing home facility. Some policies also provide funds for personal care such as paying someone to cook clean, or a cash benefit to pay for home improvements, etc.
When should I consider purchasing insurance?
1. Age 50 and older is a good time to buy a policy. The rates rise significantly each year you wait beyond age 55. Some say to wait until you are 60, but your health might change and you might be able to qualify medically.
2. If your retirement assets are expected to be above $100,000, consider buying a policy. If you have less than this, you not likely find the premiums affordable.
What should I look for in a company?
2016 update: In recent years we have seen top carriers like GE/Genworth and John Hancock increase rates on existing policyholders. In light of this, when selecting a plan, buy well below the maximum you can afford so that you can accomodate rate increases should they come.
What benefits should I buy?
There are many options to choose. Statistically, a policy with a 2 year benefit is adequate, but you might consider additional coverage should you feel at risk for an organic brain disease like Parkinson’s or Alzheimer’s. It is a big topic worthy of some conversation.
Should I buy inflation protection?
Absolutely. If the cost of care rises each year, your coverage should as well. If you buy a plan at age 50, you're not likely to use the benefits for 20 or 30 years. The cost of providing care has historically risen around 5% per year. To match this rising cost of care, it is important to purchase an Inflation rider so that your monthly benefit will increase every year so that your policy is not obsolete when you need it most. I am biased toward either a 20 year compounding inflation or 5% Simple. Other options are available, but these 2 offer the best 'value'.
To setup an appointment with Dan to discuss the issues, call 503-650-4325, or email me your interest at danneils@gmail.com
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