Your Long Term Care application declined? Now What?

It can be one of the most frustrating experiences you’ll ever have with an insurance company.  Here you are finally wanting to purchase that expensive Long Term Care Insurance Policy and the insurance carrier rejects you.  What a terrible feeling.  They don’t want me…I feel good, I look good, they don’t know what they are talking about!  These are normal feelings to have when you are declined.

So now what do I do?   First, try not to be too frustrated.  There’s more than one fish in the sea.  Second, go forward with your spouse’s approval.  Too often we see a couple apply together, one spouse receives an approval and the other spouse gets declined.  Out of frustration, often the approved spouse declines to accept their policy.  They feel that they’ll show the insurance company who’s boss.   Let’s think about this one….here’s an analogy:  Would you drop your spouse’s auto insurance if you were turned down by an insurance company?  Of course not.  So why reject LTC insurance?

Finally, work with an independent agent that specializes in Long Term Care policies.  That agent will have access to several carriers including ones that deal with tougher health situations that caused your declination in the first place.  It’s also important to design the policy correctly.  You can read a good article on 6 tips for Getting the Best Coverage.

Planning to Pay for Long Term Care

This expense can be the most devastating expense you will incur in your lifetime and the one expense Americans least plan for.

The average cost of a Nursing Facility is estimated at nearly $206 a day or $75,190 per year with the average stay being 3 years or more.

The average cost of Assisted Living is estimated at nearly $2,968 a month or $35,616 per year.

Ironically, home care can cost nearly as much or even more than facility care if you require round the clock care. For instance, the average cost for a nurses visit is $19 an hour.

These figures do not account for the rising cost of health care due to inflation.

The fact is many families spend their entire life savings within one year of using long term care services. The cost of your house is the only greater expense you may incur in your lifetime.

Source:
1. MetLife Mature Market Institute, The MetLife Market Survey of Nursing Home & Home Care Costs, Sept 2006
2. MetLife Mature Market Institute, The MetLife Market Survey of Assisted Living Costs, Oct 2006

Long Term Care Insurance - don’t leave this critical protection out of your Estate Planning

One of the most important parts of any properly designed estate plan is to have a Long Term Care Insuarnce policy in place.  At this point in your life you most likely have all of your finances in order including having your portfolio properly protected from market changes. 

Sadly, far too many Americans still have far too much risk in their estate plans.  The missing element that can literally wipe out your estate is having to pay for extended periods of care as we age.  A fantastic way to mitigate this risk is by having a properly designed Long Term Care Insurance policy in place.

Long Term Care Policies are becoming more and more popular every year and more popular with the last of the baby boomer generation.  Take this simple self test regarding paying for the costs of Long Term Care.  At today’s rates the average nursing home costs approximately $6,000 per month or $72,000 a year.  Now take your liquid assets and divide that number by $72,000.  This will give you how many years your estate would last if you needed extended care.  If you are married, take the number of years and divide that number by two…since there are two of you to pay for.  Pretty scary huh!

This little exercise can be an eye opener for most.  And that was based upon today’s costs.  Is your portfolio growing at the rate of health care costs?  Hopefully so, if not, then your assets could be depleted that much faster.

The solution to protecting your estate is to have a properly designed Long Term Care Insurance Policy in place.  Several large insurance carriers offer these great plans such as Allianz, Genworth, John Hancock and MetLife. 

Thankfully, most qualified Estate Planners understand the value of having this type of plan in place.  You can read a great article from Bacon/Wilson, Attorneys at Law, on this subject here.

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