Long Term Care Insurance - 10 Resolutions for 2009

New Year’s Day of course means it’s time for you to make your resolutions for the upcoming year. It’s well documented that the two most common New Year’s resolutions are losing weight and financial type resolutions (debt reduction, pay increase, etc.)

If you are over 40 years of age, now is the time to finally take a serious look at purchasing a long term care insurance policy to protect your assets.

Here are my top 10 resolutions specific to deciding on a long term care insurance policy:

Resolution #1 - Read the LTC Shoppers Guide. This is a great document to give you the basics of long term care insurance. It covers all the basics and helps you understand the many options that are available. Download the Long Term Care Shoppers Guide. 

Resolution #2- Start doing your homework.  The internet has thousands of pages, blogs, advise columns, experts, and government agencies that can help you start your research.  A few of my favorite Long Term Care Insurance providers are Allianz, John Hancock, and Genworth.  These three are top rated companies and provide fantastic individual plans as well as discounts for couples applying together.

Resolution #3 - Review Your Medical Records.  Since the major factor in qualifying for a policy is your current and recent past health history, it’s a good practice to understand what is in your medical file.  Even though you feel healthy, that past ailment you went to see your doctor about may come back to haunt you.  Understanding how your doctor perceived and documented your issues is important.  Policies are underwritten based upon your health and you’ll end up paying more or worse, be denied due to your problems.  Long Term Care Insurance is designed for healthy people.

Resolution #4- Schedule a physcial with your doctor.  Most companies require that you’ve been to see a physician within the past 18 months.  This makes sense even if you aren’t considering a policy.  Don’t be afraid of that doctor (especially the men reading this article).

Resolution #5- Ask your financial planner their view on Long Term Care Insurance.  This is always a good litmus test for your financial planner.  If they are negative on a plan….then I suggest you fire that planner immediately.  Long Term Care isn’t new anymore.  It’s been around for over twenty years and many of the nations top personal financial authorities strongly believe it’s a large piece of your financial planning puzzle.  Suze Orman and Dave Ramsey are big fans of Long Term Care policies.

Resolution #6- Talk with your children/parents.  If you parents are under 80 and haven’t yet purchased a policy, now’s the time to discuss this with them.  You may even have seen your own family torn apart by the catastrophic cost of providing care for a loved one.  Nursing homes and home health care options are expensive if you have to pay out of your pocket.  We all love our parents…of course we’d want to take care of them.  But can we?  The average cost of a nursing facility is over $60,000 per year. 

If you have adult children, let them know you are considering this so you can protect your assets and relieve the stress that they’d be under trying to care for you.

Resolution #7- Call/Visit a local nursing facility.  To truly understand the costs and more importantly the envirnoment, go take a tour of a local nursing facility.  Most are nice places to visit, but can you see yourself actually having to move in there?  I’d prefer to receive my care at home.  Today’s long term care policies offer provisions for home care.

Resolution #8- In Denial - Get Real.  Statistics tell us that 1 out of 2 americans will need long term care help as they age.  Most of us have homeowners insurance and we only have a 1 out of 12,000 chance that our house will burn down.  So why would you bet your life savings on a 50/50 chance you’ll need care?  And if you are married…..we’ll you get the point.

Resolution #9- Contact an Independent Long Term Care Insurance Agent.  The best way to review all of your options is with an independent agent.  They aren’t loyal to one company, therefore, they’ll work hard to find you the best priced product you can qualify for.  Insurance doesn’t have markups.  The agent is marking up your premium, the carrier sets the premium.  Your local auto agent most likely doesn’t have expertise in long term care, plus your local auto agent most likely is a “captive” agent and can only offer your one option.  Your independent agent can quickly compare dozens of companies and offer you several different options.  Request a long term care insurance quote.

Resolution #10 - Apply Today.  It doesn’t hurt to apply and learn if you’ll qualify or not.  Not everyone does.  The younger and healthier you are means the lower the premium you’ll pay, which can add up to thousands of dollars saved over your lifetime.

Here’s to a healthy 2009!

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.

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.

Get a fast, easy, and free quote on Long Term Care Insurance of all types. Please click and fill out the form for a no-obligation long term care quote.

 

Should I buy Long Term Care Insurance at 40 years old?

One thing I’ve noticed in the past few years is that the age of my prospective clients is getting younger and younger.  Years ago it seemed like everybody I was meeting with was “grandparent” types and closing in on that magical moment of retirement.  With better public awareness happening, now I’m often discussing the benefits of a Long Term Care Insurance policy with the last of the baby boomers and Gen Xers.

So what is the correct age to purchase a Long Term Care policy at?  None of us have a crystal ball to determine the precise moment the day before you should apply.  Some financial planners and industry gurus suggest 60 years of age, others say 50 is the magical age, and now we are even reading about planners and insurance agents suggesting 40 years old is not too young. 

Remember, we all have to health qualify for a policy.  With medical records becoming more reliable due to technology and medical testing being able to diagnose future problems at an earlier age, 40 is no longer too young to apply.

A benefit of purchasing a policy while you are younger is that most likely you will be healthier the younger you apply and your premiums will be lower.  Of course, you’ll pay premiums for a longer period of time, but your peace of mind will be intact.  Many agents report having clients in their thirties!

I read a great piece on Dan Blankenhorn’s blog regarding his friend that suffers from Parkinson’s Disease and thankfully has a policy in place.  You can read that story here at Dan’s Blog.

Is Long Term Care insurance good for single people?

As a Long Term Care insurance agent I run into many diverse family situations.  Second marriages, widows, never married, and divorced situations.  More often as of late I’m running into single people that have no children or their children are hundreds of miles away.  Basically, they have nobody close by to take care of them. 

One of the benefits of having a strong Long Term Care Insurance policy is that the financial burden will be lifted with a properly designed policy but also the financial stress put on your children will be lifted.  The other aspect is if you are single and nobody close by can assit with care giving, therefore, a nice Long Term Care insurance policy can protect your assets.

I read a great article on this very subject in The Dallas Morning News where Scott Burns answers a similar question.  You can read that article at Dallas News Extra Blog.

Get a fast, easy, and free quote on Long Term Care Insurance of all types. Please click and fill out the form for a no-obligation long term care quote.

Long Term Care Insurance policy International coverage

If you live in the United States and own a Long Term Care Insurance policy from one of the larger carriers you probably have an International Coverage clause.  This built in rider will typically cover you for up to 70% of your daily benefit.  The term of the coverage will limited to a specific amount of time that may differ dramatically from your US coverage.  730 days is a common limit length for coverage that most carriers provide.

The intent of this rider is to protect you while traveling.  Let’s say you take a vacation to Europe and while in London you become ill and suddenly you need help with performing two of the seven ADL (Activities of Daily Living).  After your elimination period is satisfied (deductible) you’ll start to receive benefits at 70% of your daily US benefit amount and again, for a limit of 730 days (2 years).

This is a nice benefit to have but if you plan on retiring to another country it’s a good idea to consult with your insurance carrier and review specific coverage options.

Minimum assets needed to purchase a Long Term Care Policy

Do we have enough to protect?  This question is often asked when trying to decide if buying a Long Term Care Insurance Policy is worth it or not.  This is really an individual decision and many financial planners differ in their view.  A common point of view is that you need at least $250,000 in liquid assets beside your home.  If you have $5 Million liquid, then you may be in a position to self insure.

I read a great explanation of this at Boom Tip.  This post quotes Gerri Wills of CNN money.com on this exact subject.  You can check out this post at Boom Tip.

Long Term Care Health Insurance

Get a long term care insurance quote

There are four policies everyone should have if possible. These are life, health, disability and long term care. These four policies will cover everything life throws at you, life insurance for taking care of things after your death, health insurance for taking care of you if you get sick or injured. Disability insurance protects you if you are injured and are unable to work either temporarily or permanently and long term care takes care of you if you end up with a disability or illness that prevents you from being able to take care of yourself.

Considering what each one of these would cost you on a monthly basis you may be asking yourself why should you pay out all this money for life, disability and long term when it chances of you needing it are significantly less than you needing health insurance.

While there is the chance that you may not actually need long term care insurance take a look at what the costs of long term care. These costs are estimations and may vary based on additional factors such as location and facility type. On average for a semi private room at a nursing home you can expect to pay somewhere in the neighborhood of $68,000. For home care which consists of visits about 3 times a week, you are looking at about $18,000 a year.

Of course, these numbers can vary significantly depending on a variety of different factors such as how much care you need, what type of care you need, who you are receiving the insurance through and where you are located. There are also different rates for home care visits on weekends, holidays, how long the visits are, and then there are community programs such as adult day service.

Now that you have an idea of how expensive this type of service can be you may be able to see why there is a need for this type of insurance policy. Another thing is that many people believe that Medicare will help to provide for long term care.

Well, they do provide for it under certain situations such as when you need skilled medical services or recuperative care. It does not however pay for the majority of the activities which are covered under long term care insurance. These are the daily living activities such as eating and bathing.

Medicaid provides for more than Medicare but you have to meet the criteria for income and functionality which may be difficult for most people to meet. There are other programs which assist in long term care but they are usually for highly specific populations.

Based on this the average individual can not afford to pay for these services out of pocket based on retirement income and unless criteria are met there are no public assistance programs that will assist with these expenses. The expense of unaided long term care alone is well worth the consideration of purchasing this type of protection. Not only is cost a considering factor but also the piece of mind of knowing that should a situation that requires long term care arise you and your family are protected and you can be assured of the getting the care you need.

Get a fast, easy, and free quote on Long Term Care Insurance of all types. Please click and fill out the form for a no-obligation long term care quote.