What Can A Long-Term Care Insured Solution Do For You Today?

“Your Money Or Someone Else’s”

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A long-term care insurance policy provides more than just money to protect against the risk of needing care because of your inability to live independently and function on your own.  The inherent underlying value of this type of insurance is as much about having control and choices while protecting your financial well-being, future retirement income plans, and lifestyle.

A long-term care insured solution offers immediate and lasting psychological benefits on the first day of policy ownership.  It creates feelings of comfort, serenity, and financial security.  These significant freedoms are with you for a lifetime and account for the low lapse rate whether or not benefits are ever received from a policy or not. 

A LONG-TERM CARE INSURED SOLUTION IS IN YOUR NAME, HOWEVER, IT BENEFITS YOUR SPOUSE AND CHILDREN JUST AS MUCH!

ADVANTAGES

HERE IS WHY…

LONG-TERM CARE CASH ADDS TO YOUR VALUABLE ASSETS, AND PROTECTS THEM AT THE SAME TIME:

The moment your policy is in-force; you’ve created and added HUNDRED OF THOUSANDS OF $$$ to your savings, investments, and retirement income plans while protecting them at the same time.

REMEMBER A LONG-TERM CARE INSURED PLAN ALWAYS INCREASES YOUR ASSETS; A SELF-INSURED PLAN TAKES AWAY FROM THEM.

Budgeting a premium or leveraging an asset to own LTC insurance lets you know your lifetime of hard work, savings, investing and retirement planning will not be destroyed by an unplanned long-term care event.  It should be thought of from the perspective of risk preparedness, and a strategic part of every sound financial and retirement income plan.

Not planning for this risk is like trying to construct a home without a foundation.  No one wants to see everything they have built wrecked or valuable assets depleted when an unintended need for care occurs in the future.  Without an insured solution to pay for long-term care services, you could be putting your assets and income at risk.

Unfortunately, this happens more often than anyone expects due to the high percentage of people requiring care as they age and not planning for this contingency.

Others recognize the high cost for care and want to minimize the impact on their assets or don’t have enough in assets to pay for a high level of care they will desire or need in the future.

IMPORTANT!  Depending on your actual costs and inflation factor selected or rejected, you still might have to pay for the difference in your care.  However, are you better off with something verse nothing?

Not sure of the costs now or in the future.  For more info, see “Helping You Understand The Cost of Care For Long-Term Care Services Now & In Your Future”.

PRIVATE PAY:

When you own LTC insurance, you will be in the private pay category.  The two most important words when it comes to long term care are “PRIVATE PAY”.  In short, private pay means never being put in a position to settle for second best.

There is an acute shortage of caregivers in the United States.  A private pay customer is empowered to hire and fire, making sure caregivers are competent, friendly and concerned about your care.  If facility care is needed, private pay gives the freedom to leave and choose another environment if you wish.  PRIVATE PAY EQUALS POWER OF CHOICE.

YOU WON’T BE A BURDEN:

Owning a LTC insured solution will provide you with the comfort of knowing “today” you or your spouse will never be a burden on each other or your family or friends in the future.

PROTECTS AND MAINTAINS EACH SPOUSE’S LIFESTYLE:

Owning a long-term care insured solution protects and maintains each spouse’s lifestyle going forward into the future.

Twenty to thirty years from now, a typical three to five-year claim could cost well over $1 million.  What once was a bright future for a couple planning to retire and enjoy life can be destroyed by a future long-term care event.  Most spouses don’t realize this until it is pointed out to them and hopefully not too late.  Do spouses owe it to each other not to destroy their lifestyle should one require future care?

CAREGIVING PROBLEMS — WON’T RUIN YOUR SPOUSE OR CHILDREN’S HEALTH BY MAKING THEM YOUR PRIMARY CAREGIVER:

The second toughest job in the world is being a care­giver; the toughest job is being an unpaid caregiver.

An act of compassion, you have to admire the love, exhausting work and time taken in providing care for a disabled family member.  Parents will do it; spouses will, children may too, but they do not have to if there is LTC insurance.

Caregiving is physically demanding; lifting and mov­ing one from a chair to a bed is hard work, especially if the caregiver is older or smaller than the spouse.  Caregiving is not only physically hard, but it is also mentally and emotionally draining at the expense of your health and well-being.  One can feel trapped, no longer being able to live their own life because they are on constant call.

A policy creates the funds to hire and pay professional caregivers to do the heavy lifting while providing the required help, care, and support for a loved one.  It eliminates your spouse or children from having to be put in the difficult position of providing care (e.g. feeding, dressing, bathing, etc.,) and removes them from the responsibility of caregiving on a full-time basis.  Plus, it is very difficult to juggle family and work obligations while providing care for an aging parent, family member or relative, and it is something many would be better off avoiding than being forced into a caregiving situation when planning options were not considered.

Long-term care insurance allows loved ones to care ABOUT YOU instead of having to care FOR YOU.

PROTECTS CHILDREN FROM HAVING TO MAKE TOUGH FINANCIAL DECISIONS:

You will know your children will never be put in a position of having to choose between the high cost of long term care for one parent or pro­tecting the assets of the healthy parent when you own LTC insurance.

Adult children have a natural tendency to help and assist their parents, but what do they do when assisting one parent, which harms the other?

Balancing the cost of care for one parent while protecting the assets of the other can be an impossible and difficult task. The beautiful part about owning LTC insurance is that the children will not be put in this position.

HOMECARE:

There is no place like home…Dorothy stated in The Wizard of Oz”.  She was right!

You want to stay in the comfort of your home as long as you can be surrounded by loved ones.  Owning a long-term care insured solution creates a plan to “PAY” and “STAY” at home.

It’s a rare person who says “I want to live in a nursing home in my final years.”  Owning LTC insurance with a 100% home care benefit provision is really a nursing home avoidance policy.  It allows home services to be maximized while keep­ing you in familiar surroundings much longer than would be possible otherwise.  An additional benefit of home care ser­vices is that friends and relatives will want to come and share their companionship for more than the one hour, which is more difficult being in a nursing home setting.

STAY AT HOME, KEEP YOUR BELOVED PET:

If you own LTC insurance, you will never be forced to get rid of your beloved pet; they will always be with you right by your side at your home.   A pet is so much more than an animal.  Their therapeutic abilities are numerous; science has shown that petting a dog or cat is calming and provides ongoing happiness.   They are companions that are always glad to see you and giving you unconditional love.

YOU KNOW YOUR CHILDREN WILL NEVER HAVE TO CHOOSE BETWEEN YOUR CARE AND THEIR INHERITANCE, WHICH OFTEN INCLUDES YOUR CHARITABLE CONCERNS IF YOU OWN LTC INSURANCE:

An estate planning attorney told the following story.  A client with a net worth well over $100 million was asked to review a client’s insurance policies.  One of the policies was LTC insurance.  Thinking to himself that he was about to give some of the best advice of his legal career, he sug­gested his client cancel his LTC insurance “because he had plenty of assets to cover an event that could occur.”

The elder client who took risks his entire life grabbed the attorney by the hand and simply said, “No, that policy I am keeping because if the time comes I need help, I want my children thinking about my care and not their inheritance.”

In short, a long-term care plan looks out for you and protects your assets during your life and when life is over.  You can feel good about your legacy plans knowing you’ve taken care of loved ones and charitable causes.  An insured long-term care solution simply protects you and your wishes.

“PLAN BACKWARD LOOK FORWARD”:

Long-term care is often the “elephant in the room.”  People may not want to acknowledge that they may need it someday, but as we’ve seen, it is a real concern as you think about the future and transition into retirement.  As difficult as it may be to have the conversation and focus on the subject, a long-term care discussion should be easier when you’re active, healthy and your chances of qualifying for an insured solution are greater.

One strategy for addressing long-term care is to “PLAN BACKWARD.”  The way this works is to discuss the concerns and expenses of needing long-term care services now and how to solve this problem with an insured solution.  Then move towards all of the other fun things you want to do in retirement.  This way you can “LOOK FORWARD” and enjoy this new life stage with more peace of mind about the future or whatever you want it to look like for you.

ENJOY YOUR FUTURE YEARS AND RETIREMENT INCOME:

When you own LTC insurance, you will have the security of knowing your policy creates the freedom to enjoy your future years and retire­ment income the way you have planned it rather than on an unplanned long-term care event.

Talk to people in their seventies and eighties without a long-term care insured solution, and they must consistently make the conscious decision that certain retirement assets they have will not be touched be­cause one of them might have a long term care event.  People with an LTC insurance policy do not have this concern.

I’m sure these people would gladly pay a premium they passed up in their forties through sixties for a LTC insurance policy that would restore more freedom without worries to enjoy their retirement.

When planning for retirement, many people fail to consider one important and potentially significant expense…the cost of long term care services.  The average cost of nursing home care is running $80,000 to $90,000 and quickly approaching $120,000 or more a year.  And that’s just for one person.  If both partners need care, a retirement nest egg could be depleted quickly.

Who Benefits From a Long-Term Care Insured Solution? Everyone!

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HERE IS A SUMMARY OF THESE VALUABLE BENEFITS

RESOLVES a huge retirement planning issue now unless you have accumulated a large mountain of money specifically intended to pay for long-term care services.

CREATES readily available LTC income added to your assets, while protecting the same assets against a pile of enormous bills due to the high cost of care now and in your future. 

CHILDREN with financial means often recognize the advantages and may pay premiums on a policy for mom or dad.

PROTECTS and maintains each spouse’s lifestyle.

RELIEVES the burden and personal guilt from inaction.

ELIMINATES and reduces the emotional strain on your loved ones so a long-term care event won’t ruin your spouse or children’s health by making them your primary caregiver. 

CREATES a preferable and favorable alternative to pay for services provided by caregivers, not family members.

RECEIVE the highest quality of care in the setting you prefer. “Private Pay” equals the power of choice with multiple options to choose from including home care, adult day care, assisted living, or nursing home depending on your care needs and how they progress.

“HOME SWEET HOME” lets you stay in the comfort of your home surrounded by loved ones.  Owning a long-term care insured solution creates a plan to “PAY” and “STAY” at home.

KEEP your beloved pet when you stay at home.

PROTECTS children from having to make tough financial decisions, and eliminates the difficult position of having to choose between the high cost of long-term care services for one parent or protecting the assets of the healthy parent.

PROTECTS family inheritance or assets from being spent and lets you leave a legacy for your favorite charity / cause.

TAX ADVANTAGES allows for the premium deductibility with certain types of long-term care insured solutions.  Premium deductions increase as you age.  Benefits received are tax-free for all reimbursement policies, which are the majority of policies sold today.

PRESERVES the quality of life, maintains your dignity and independence.

PROVIDES Peace-Of-Mind today with security for tomorrow when a LTC plan is in place.

Types of Policies

There are different insurance solutions to use “Someone Else’s Money” to pay long-term care costs.

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Let’s start with two assumptions regarding long-term care policies and planning with an insured solution.  There are only two events that will occur going forward.  You will either need long-term care services and sadly die, or you will sadly die and never need long-term care services.  Of course, no one can predict your particular needs for future care.  This is why long-term care planning with an insured solution is a guess even though requiring long-term care services are a high probability event especially the longer you live.  Will you need long-term care services for a short period of time, the average length of time for a claim (2.5 to 3 years) or for a very long time?  No one knows! 

REMEMBER, THERE IS NO ONE BEST POLICY.  IT’S WHAT INSURED SOLUTION WORKS BEST FOR YOU!

NOTE:  I am throughout this section referring to the insured and owner being the same for personal planning reasons.

Traditional Stand Alone Long-Term Care Insurance

TRADITIONAL STAND-ALONE long-term care insurance were the only types of long-term care solutions offered for many years.  The marketplace has changed in recent years with higher premiums and fewer companies writing this type of coverage.  However, a traditional stand-alone policy still remains a viable way to protect yourself from the risk of needing LTC services for many reasons.

THE ADVANTAGES AND DISADVANTAGES OF TRADITIONAL STAND-ALONE POLICIES

TARGET MARKET: Issues Ages 30 – 79

(1) Tends to still be the least expensive, most flexible, and affordable way to meet your needs and pay for future LTC costs and services. 

(2) Benefits are comprehensive allowing you to choose a personalized long-term care solution at a premium designed by me to fit your personal budget. 

(3) Coverage levels depending on your needs provide a variety of services including HOME HEALTH CARE, ADULT DAY CARE, ASSISTED LIVING, NURSING HOME, and HOSPICE CARE.        

(4) Provides known coverage amounts on day one and in the future.  Think a pool of money (e.g., $200,000, $300,000 or $500,000, etc.) you’ve added to your assets for future long-term care services.   

(5) Provides valuable care coordination benefit services and planning resources. 

(6) Benefits can increase over time with various inflation protection options if selected at the time of application. 

(7) Elimination period sometimes called the “waiting period” or “qualification period” is the period of time that must elapse after a benefit-triggering event has occurred, and before benefits start.  Consider it similar to an insurance policy’s deductible. 

(8) Premiums are waived after the waiting period has been satisfied when receiving care, and the waiting period only needs to be satisfied once.     

(9) Premiums are tax-deductible depending on your personal situation.    

(10) Benefits are received tax-free.    

(11) A traditional LTC policy continues to the best option for many if you can health qualify.     

(12) A traditional LTC policy remains an important solution in a sound retirement income plan.

HERE ARE SOME OF THE MORE COMMON BENEFITS AND FEATURES FOUND IN TRADITIONAL STAND ALONE LONG-TERM CARE POLICIES. 

Home Care: Benefits are provided to help you stay at home as long as possible.  They can include personal care services to assist with activities of daily living.  Homemaker services to provide help with grocery shopping, meal preparation, and housekeeping.  Professional services of a registered nurse, home health aide or therapist.  Plus adult day care services.

Cash Benefits: Provide a reduced percentage of your monthly long-term care benefit paid to you in cash each month you are chronically ill.  This benefit is not subject to a waiting period and provides a helpful strategy and flexibility for families to explore care alternatives or pay for services not otherwise covered by the policy.  You can turn the cash benefits off at any time and receive other benefits under the policy for which you are eligible.  Benefits are subject to the maximum amount shown in the policy schedule.

Bed Reservation Benefit: Policies will provide usually from 21 to 30 days in a calendar year to reserve your bed should you be confined to a facility (nursing home and assisted living) and require hospitalization.  Benefit does not apply should you permanently be discharged from the facility.

Care Advisory & Coordination Services: Would you know where to go to find long-term care services?  The process might seem overwhelming.  The insurance company provides access to the services of a care coordinator – a licensed health care professional who will assess your needs, develop an individualized plan of care and help you find and arrange long-term care services, preferably and safely at home first.  There is no waiting period to satisfy care advisory services, so a care coordinator can be assigned right away. The use of a care coordinator is not required and you can go outside of the insurance company; however, some additional policy benefits are available when a care coordinator from the insurance company is used.

Caregiver training

Durable medical equipment

Home modifications

Medical alert systems

Respite Care: Unpaid caregivers often need a break, and this benefit provides short-term relief to an unpaid caregiver for usually 30 days in a calendar year.  A waiting period is not required to receive this benefit.

International Benefit: If you’re traveling outside the United States, Canada or the United Kingdom when the need for care arises, policies will usually pay up to 12 months for covered long-term care services you receive.

Benefits Available At An Additional Cost

Inflation Protection:  The cost of long-term care services is likely to be higher in the future when you need care.  You have options to add an inflation protection benefit, which increases your maximum monthly benefit and coverage maximum amount each year.

Shared Care: If you run out of benefits but still need care, you can access benefits under your partner’s identical policy providing your partner with at least one year of benefits.  In addition, if either partner dies while both policies are in force, the surviving partner receives the deceased partner’s remaining maximum lifetime benefit without having to pay the deceased partner’s premium.

Nonforfeiture Shortened Benefit Period:  Should you stop paying premiums after your policy has been in-force for a period of time as determined by the insurance company, this allows your coverage to continue on a reduced basis with some level of benefits for a period of time.

Security Benefit:  If your partner doesn’t’ have a long-term care insurance policy, the security benefit can help ensure he or she is cared for while you receive long-term care services.  Your policy will pay an additional 60 percent of your monthly reimbursement benefit that can be used to help pay for care or living expenses for your uninsured partner.  This will not reduce your maximum lifetime benefit.

Joint Waiver of Premium:  If one partner is receiving covered long-term care services, this benefit waives premium on both partner’s policies.  If your premium increased because you purchased additional coverage after your policy was issued, such as an increased level of inflation protection, that portion of your premium will not be waived until the increase has been in effect for 10 years.

Survivorship Benefit:  If one partner dies after both have been in-force for 10 years, the premium is waived for the surviving spouse for the remainder of his or her lifetime.  If your premium increased because you purchased additional coverage after the policy was issued, such as an increased level of inflation protection, that portion of your premium will not be waived until the increase has been in effect for 10 years.

Waiver of Elimination Period for Home Care:  This allows you to begin receiving home care benefits immediately with no waiting period to satisfy.  This also means days in which the elimination period is waived for home care or adult day care will be used to satisfy the elimination period for other benefits available under your policy.

Return of Premium:  If you’re concerned about losing your premiums at death, a return of premium benefit, upon your death, refund up the full amount of premiums you paid, excluding claims paid by the policy.

(1) What’s the most frequently asked question when one is considering the purchase of traditional standalone long-term care insurance. “What happens if I buy this policy and never use it?” Yes, that is a possibility and could be considered a disadvantage.  Some will recover and some will die before they’re eligible for benefit payments.  Yes, premiums are LOST if death occurs without the use of benefits, and this has been a deterrent for many to purchase this type of long-term care policy.  Purchasing insurance is always a contingency plan.  You calculate the costs, risk, and benefits – and should the need arise hope that you come out ahead.  Stand-alone long-term care insurance is just that, insurance, and it’s no different than auto, homeowners or liability insurance.  People hope they never use it, but it provides a feeling of security and peace-of-mind just in case you do.  The risk for a long-term care event just happens to be greater than wrecking your car or a home burning down.  However, in the event, you die quickly and receive little to no benefits from the policy.  Some companies offer a return of premium benefit.  This isn’t a death benefit – it’s simply a return of paid premiums, minus any claims, to a designated beneficiary.

(2) Premiums are projected to remain level.  They are not guaranteed to remain level.  Important points: Can you continue the premiums going forward into the future?  Can you continue them if there is a rate increase?

(3) Historical premium rate increases throughout the long-term care industry on older policies.  See understanding current premium rates and pricing below.

(4) Current premium rates are much higher based on the current economic environment and the knowledge the insurance companies have acquired over the past 30 years since traditional long-term care insurance was introduced into the marketplace.

(5) There are fewer companies writing stand-alone long-term care insurance.

(6) Inflation benefits cost much more.  Because the costs of long-term care services will likely increase over time, you should consider whether you want to self-insure the difference between your current benefit level and the actual cost of care or pay for inflation benefits, which have become an expensive cost feature on all types of long-term care insurance policies.

(7) Females pay more as they live longer and require care. 

(8) Qualifying can be challenging and has become more difficult.

UNDERSTANDING HISTORICAL PREMIUM RATE INCREASES, AND CURRENT PREMIUM RATES FOR TRADITIONAL STAND-ALONE LONG-TERM CARE INSURANCE POLICIES.      

Stand-alone long-term care policies are considered to be guaranteed renewable contracts.  This means the insurance company can’t cancel a policy (unless for non-payment of a premium) or change benefits once it has been issued.  You cannot be singled out for an increase because of a change in your age or health.  However, they can raise premium rates for all individuals covered under the same policy series approved in the state where it was issued.   PREMIUMS ARE PROJECTED TO REMAIN LEVEL — THEY ARE NOT GUARANTEED TO REMAIN LEVEL.  Premium rate increases must be filed and approved by the department of insurance, and the requested percentage may not always be fully allowed.  Premium rate increases do not occur or increase each year.

UNDERSTANDING HISTORICAL PREMIUM RATE INCREASES:

A brief history…Stand-alone long-term care insurance was the first policy ever marketed to cover what had always been done by spouses for loved ones in the 1950s and 1960s.  Premiums were established by actuaries who had no data on who would purchase these policies and how they would be used.  They were offered with generous benefits including 5% compounding inflation every year to keep up with the increasing cost of care in the future.  One company, I recall even rolled out products targeting individuals in their 90’s, and factor in very liberal underwriting.  It was a recipe for disaster!

So what happened?  The insurance companies miscalculated the true costs of providing this type of insurance and simply got it wrong for many years because they didn’t price these products accurately for the risk they were undertaking and benefits offered to insureds.

They didn’t realize or anticipate no one dropped these type of policies once they were purchased especially as insureds lived longer.

Claims naturally followed by insureds keeping their policies.

They made huge forecasting errors about policy cost of living benefit adjustments each year, especially the industry standard 5% compounding COLA.  For example, a $6,000 initial monthly benefit becomes $12,000 in 15 years or $10,000 a month becomes $20,000 in 15 years.  Multiply this amount by the benefit duration selected (2,3,5,7,10 years or lifetime).  Was the projected level premium being charged when approved enough to cover the companies increased claim exposure in the future?

They have had much lower than projected and realized safe money investment returns to make a profit on their premiums and pay future claims due to the historic low-interest rate environment over the past 30 years.

These are the major reasons for rate increases on blocks of older business and lack of profitability causing the majority of insurance companies to discontinue writing stand-alone long-term care policies.

UNDERSTANDING CURRENT PREMIUM RATES AND PRICING:

What has changed?  Premiums are higher!

It must be stated rate increases are still possible.  However, the reasons for future premium rate increases are greatly diminished by new pricing standards factored in with assumptions learned over the past 30 years.

The universe of carriers that offer standalone long-term care policies is now more limited.  Those that are currently offering policies have weathered the past and are more committed to the future given the new marketplace realities.

Policies are priced based on current minimal interest rates.  Some conclude that the only place interest rates can go in the future is up.  If interest rates do increase, the internal profit margins on the policies will also rise proportionately, allowing for a reduced need for any rate increase, or a minimal impact at the very least.

Some industry experts think traditional stand-alone long-term care insurance could be entering a period of greater rate stability with premiums properly priced today.   In addition, fewer companies with a greater understanding of the risk, hopefully, lessen the need for future premium rate increases.

Another pricing error was in the assumption that policies would be purchased and lapsed, which is why lapse-supported pricing is a thing of the past.

Proper increased pricing for compounding cost of living 5% policy benefit increases as well as the alternative cost of living benefit increases are available at a much higher cost.

The implementation of gender-based premium pricing.  Premiums reflect claim experience.  Men die sooner, women live longer and utilize their benefits.  Therefore women will pay more.

Benefit periods of 5 years make it easier for the insurer to reserve and manage claims.

No more lifetime benefit or limited pay options.

Linked Benefit Life And Long-Term Care Insurance

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The long-term care marketplace has evolved with a newer generation of products commonly known as Linked, Hybrid, or Combination insured solutions. These names are commonly substituted and are even referred to as Asset-Based at times.

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What makes these products different? Benefits can be “ACCELERATED” from these type of life insurance policies to help pay for long-term care services.

The popularity of these products has grown because the insured will either receive some form of “LIVING BENEFITS” that can be used for long-term care services or a beneficiary will receive a life insurance death benefit or both in some situations.  There’s a payout, “ONE WAY” or the “OTHER”.  It’s not a “USE IT” or “LOSE IT” like a traditional stand-alone long-term care insurance product.  You get something in return for your premiums, which is why these products are not an “ALL-OR-NOTHING” decision and may be a good alternative to traditional stand-alone long-term care insurance.

Essentially long-term care comes in two forms the traditional stand-alone long-term care insurance mentioned above or life insurance based with different varieties available and described below.

Benefit

LIFE AND LONG-TERM CARE INSURANCE 

The term Linked Benefit refers to life insurance policies qualified under IRS code section 7702(B) to provide actual long-term care insurance benefits as well as life insurance.

You select how much of your potential life insurance benefit you want to make available for long-term care expenses.  This is called your accelerated benefit amount and it can be anywhere from 1%, 2% or 4% of the policy face amount or a specific dollar amount.  This is the amount that will be available each month to cover long-term care costs.

Typically, an additional rider is available that extends your long-term care benefits once all of the life insurance has been offset for long-term care services.  These riders can double or triple the size of the dollars created to pay long-term care costs with lifetime benefits obtainable depending on the company and product.

These types of insured solutions leverage a premium paid from income, an under-performing asset or the first liquid asset you would use to for long term care costs.  The leverage occurs when repositioning this premium or asset to the insurance company thereby creating a larger pool of income to pay for long-term care expenses, and providing a minimal to modest death benefit should care not be needed.  These policies are usually reimbursement type contracts.  Benefits received for long-term care costs or life insurance are tax-free.  

Most of these policies allow for a single premium payment or ongoing premium payment for a period of time or a lifetime.  Premiums are usually guaranteed with no rate increases.  Often these type of policies provide a money back refund when purchased with a single premium payment should you have buyer’s remorse.  What do you give up?  The opportunity cost of investing that money.

HOW ARE YOU ELIGIBLE TO RECEIVE BENEFITS UNER A LINKED-BENEFIT LIFE AND LONG-TERM CARE INSURANCE POLICY?   

A chronically ill person is an individual who has been certified by a licensed healthcare practitioner as unable to perform, without substantial assistance from another person, at least two activities of daily living, which include bathing, continence, dressing, eating, toileting, or transferring for a period of at least 90 days due to a loss of functional capacity.  You are also considered chronically ill if you are certified by a licensed healthcare practitioner as requiring substantial supervision to protect you from threats to health and safety caused by severe cognitive impairment (Dementia, Alzheimer’s disease or Parkinson’s).  Care must be provided under a plan of care prescribed by your licensed healthcare practitioner.  Your chronic illness and care plan must be reconfirmed once every 12 months for as long as care is required.  

You are paid for qualified long-term care expenses – up to the monthly maximum benefit approved for and specified in your policy.  Your long-term care benefits will continue as long as you’re chronically ill, or until your entire long-term care acceleration of benefits or long-term care extension of benefits are exhausted.

LINKED POLICIES (INFLATION BENEFITS)

Linked policies offer inflation protections, which like all inflation benefits will increase premiums substantially.  There are different types and options available depending on the company and product.  

Policies applied for without inflation benefits at $10,000 to $12,000 a month can provide an inflation hedge compared to current costs.  However, fast forward 20 to 30 years, it may not be sufficient at claim time compared to the high cost of care in the future.  Consider if your retirement income is not growing, and long-term care insurance benefits are not increasing, you will have to spend your dollars to cover the difference.

THE ADVANTAGES AND DISADVANTAGES OF LINKED BENEFIT LIFE AND LONG-TERM CARE INSURANCE

TARGET MARKET: Issue Ages 20 – 80 (VARIES BY COMPANY AND PRODUCT).

This product is ideal for those between the ages 35 to 70 who have a need for additional life insurance with long-term care benefits.

(1) Creates an immediate leveraged pool of money for home care, adult day care, assisted living or nursing facility long-term care expenses.
(2) Premiums are guaranteed not to increase.
(3) Single or multi-pay options (1, 3, 5, 10, 20-Pay or lifetime) (varies by company and product).
(4) Waiver of premium available with some products.
(5) Return of a single premium (varies by company and product). Of course this means you had lost the growth of this premium if you invested it.  Few actually ever request a return of premium. But many like the idea they can get their money back.  
(6) Tax-free benefits on acceleration for reimbursed long-term care expenses.
(7) Tax-free death benefit (should you not need long-term care).
(8) Lifetime benefit period available for long term care expenses (varies by company and product).
(9) Inflation protection available (varies by company and product).
(10) Care advisory services are available with personalized advice from a licensed health care professional on making smart long-term care decisions and helping arrange for various types of home care, assisted living and nursing facility services.
(11) Life insurance cash values can be exchanged tax-free by 1035 exchange from an existing life insurance policy to linked benefit life and long-term care insurance policies.  
(12) Joint protection available for couples.   Covers two people with one life insurance policy for less by spreading the risk over two lives.
(13) Simplified underwriting acceptance by telephone interview for those in very good health depending on the company and product.  Should there be medical issues more involved underwriting will be required.
(14) Underwriting offers with an extra premium charge for substandard risks (varies by company and product).

(1) Underwriting required to qualify.

(2) Single premium, as well as the annual cost, may be difficult for some.

(3) Must be able to continue making premium payments on limited pay scenarios (e.g., 3, 5, 10 or 20 years)

(4) Inflation protection as an option may not be available depending on the company and product.

(5) Inflation protection can be expensive.

(6) Loan or cash withdrawals will result in a reduction of long-term care benefits and can also jeopardize your policy’s performance and guarantees.

(7) No need for additional life insurance.

(8) These life insurance based insured solutions cost more than traditional stand-alone long-term care insurance due to the life insurance based product structure.

Life Insurance Hybrid Or Combination Policies

HOW HAS LIFE INSURANCE CHANGED TO HELP INSUREDS WITH A CHRONIC ILLNESS, CRITICAL ILLNESS OR TERMINAL ILLNESS?

Let’s compare life insurance to your smartphones?  Life insurance since its evolution has always been there to pay a death beneficiary to a designated beneficiary when one’s life ended.  The death benefit has helped millions and millions of families avoid financial catastrophe when loved ones passed away, and even to this day, the death benefit remains the vital “basic function” of a life insurance policy.

When Alexander Graham Bell invented the telephone in 1876, he designed it to do one thing and one thing only – make phone calls.  The phone evolved from a clunky rotary phone with a cord to the modern day world of smartphones.  These miniaturized supercomputers have no cords and can do so much more than make phone calls.

Swipe the screen and you can access the world’s wealth of information and perform many tasks.  You can send text messages, take photos, browse the internet, gets questions answered, calculate numbers, read books, keep track of our schedules, navigate your way around town, play music, trade stocks, turn on a flashlight in the dark, and yes, still make telephone calls.

Smartphones with all of these features plus more have adapted because of innovation, competition and changing needs in our technology-driven fast-paced world.

This same concept of “evolution by necessity” applies to life insurance today with innovative “LIVING BENEFITS”.  This means benefits can be accessed from a life insurance policy while alive and in a variety of new ways with the advantage of putting money in your hands to pay expenses or replace lost income associated with a Chronic, Critical or Terminal illness.

Why did this evolution occur?  Like smartphones, it was a reaction to innovation, competition and changing needs due to the high rate of medical bankruptcy, survival rates (critical illness), cost of care for (chronic illness), and peace-of-mind / dignity with (terminal illness) benefits, which are all on the rise in our modern and changing world.

Having “LIVING BENEFITS” options in your life insurance policy protects you and your loved ones  – not only in case you die but also in case you don’t!

WHAT IS THE DIFFERENCE BETWEEN LINKED-BENEFIT AND HYBRID / COMBINATION POLICIES?

Linked-benefit life insurance policies provide actual long-term care insurance benefits.  

The term Hybrid or Combination plans refer to different varieties of life insurance (whole life or universal life) products sold with accelerated benefit riders under section 101(g) of the IRS code.  These riders allow for the acceleration of the death benefit in the event of (1) Chronic Illness, (2) Critical Illness, or (3) Terminal Illness.  These types of policies provide benefits that can be used for any purpose including long-term care costs subject to qualifying for benefits and a claim being approved.  These riders are either paid with an additional premium at policy issue, paid out of cash values or a charge is applied at the time of the benefit acceleration.  It depends on the company, product, and benefit selected.  There are some varieties even tied to annuities, but I will only be discussing life insurance based policies in this section.

WHAT IS A CHRONIC ILLNESS?

The term “chronic illness” refers to a state of health.  It’s important to understand that certification of a “chronic illness” is required to trigger any type of policy whether a traditional stand-alone long-term care insurance policy, a LTC rider on life insurance or a chronic illness rider on life insurance.

WHAT IS A CHRONIC ILLNESS RIDER (POLICY BENEFIT)?

A “chronic illness” rider allows for the acceleration of a death benefit from a life insurance contract, for a “chronically ill” insured, and subject to a claim being approved.  Benefits can be used for any purpose including chronic illness costs.   

Chronic illness riders are governed by IRC Section 101(g) but are not subject to the long-term care insurance rules under Section 7702B or state regulations pertaining to long-term care insurance.

Note the definition of “chronic illness” under 101(g) refers to the same definition provided in Section 7702B for “linked benefit” long-term care products – i.e., being unable to perform at least two activities of daily living for a period of 90 days or requiring substantial supervision due to severe cognitive impairment.  

HERE ARE THE DIFFERENCES:

(1) A chronic illness rider cannot be marketed or used in sales literature as long-term care insurance or as providing long-term care benefits in a sales presentation.  The term “chronic illness” must be used instead.

(2) A physician must also certify that the insured’s chronic illness is likely to last the rest of the insured’s life.  In other words, the medical condition usually must be non-recoverable.  It is important to note here, some companies are now removing this non-recoverable requirement as a condition for collecting benefits under the policy. 

This permanency condition is not required of long-term care riders under “linked benefit” products and is a notable distinction between these two types of riders.    Conditions such as mild to moderate strokes, orthopedic repairs, physical complications from cancer recovery, and other recoverable conditions would not be eligible for claim or benefits under a “chronic illness” rider but will be eligible under a “long-term care” rider.  Products that include a “long-term care” rider and pay long-term care costs cover all chronic illness, but “chronic illness” riders do not necessarily cover all claims for long-term care.  Long-term care riders offer more comprehensive coverage and must be compliant with NAIC (National Association Insurance Commissioners) LTC Model Regulations.  Note some companies may allow “chronic illness” riders to pay claims if the condition is temporary in nature depending on the company and product.        

(3) A life insurance policy with a chronic illness rider also does not require the agent to be licensed to sell long-term care coverage or have any special training, as is required with a “long-term care” rider.

WHAT DOES A DOLLAR-FOR-DOLLAR OFFSET LOOK LIKE?

The life insurance Hybrid or Combination version normally lets you apply and accelerate a  1%, 2% or 4% of the face amount for monthly living benefits when needed, or you select a designated monthly benefit e.g., $10,000 at policy issue.  Each dollar of benefits paid reduces the death benefit by one dollar – resulting in every dollar being paid – either as a living benefit or a death benefit.

(Example 1) a $500,000 face amount with a 2% acceleration = $10,000 a month for 50 months of benefits.

($500,000) at a 4% acceleration = $20,000 a month for 25 months.

The following chart shows you what a dollar-for-dollar monthly / annual offset looks like against the death benefit with reimbursed living benefits that can be paid for chronic illness costs or the death benefit.  Both are received tax-free.  Indemnity benefits for chronic illness costs are paid subject to increasing IRC limits each year and may not entirely be received tax-free.

I have assumed chronic illness (LTC) monthly benefits at a 2% ($10,000) acceleration of the $500,000 face amount. A small residual death benefit being paid in excess of the initial $500,000 face amount may be offered but is not available with every company therefore not known or shown.

(EXAMPLE 1)

Claim
Year
Death Benefit
Start of Year
LTC Monthly
Benefit
Annual
Payout
Remaining DB
At End Of Year
Cumulative LTC
Benefits Paid
1 $500,000 $10,000 $120,000 $380,000 $120,000
2 $380,000 $10,000 $120,000 $260,000 $240,000
3 $260,000 $10,000 $120,000 $140,000 $360,000
4 $140,000 $10,000 $120,000 $  20,000 $480,000
5 $  20,000 $10,000 $  20,000 $      0 $500,000

Let’s assume under (Example 1) you receive $10,000 a month for 25 months of benefits then death occurs.  You would have received $250,000 in benefits to use for a chronic illness or other costs and your designated beneficiary receives $250,000 in life insurance.  Should you die suddenly and collect no living benefits your designated beneficiary receives $500,000.  You collect benefits or a beneficiary collects one way or the other.

UNDERSTANDING REIMBURSEMENT OR INDEMNITY PAYMENTS:

The majority of policies being written in the marketplace today are of a “REIMBURSEMENT” payment regardless of the insured solution considered.  There are “INDEMNITY” payment policies available.  Older policies paid daily or monthly indemnity benefits.  Reimbursement benefits are received income tax-free.  Indemnity benefits are taxable past certain daily benefit amounts ($370 in 2019).  Indemnity limits within IRC formula limits are established each year.  Amounts over these limits must be established with receipts that the money was used to pay for long-term care expenses.

With Indemnity long-term care insurance, you receive the full amount of your daily or monthly benefits regardless of the cost of care you receive. Supposed your daily benefit is $300 and your daily long-term care expenses are $175, you still get the full amount of $300, and spend the excess money however you choose.  Reimbursement long-term care insurance using the same situation with a daily benefit of $300 and your long-term care expenses are $175, you only get reimbursed for the exact amount of $175 for LTC expenses, the excess amount which is $125 is not lost and remains in your pool of dollars for future use.

A reimbursement long-term care policy requires you to submit bills to be reimbursed for either your daily or monthly benefit maximum.

A reimbursement policy “may” pay for alternative care services if the insurance company chooses to approve the expenditure, but they generally do not reimburse for the cost of care provided by an immediate family member or for care from an unlicensed caregiver (which can be less expensive).

A cash indemnity policy can be used for 100% of the benefit without restriction from the insurance company; thus the insured / owner can pay a family member or a friend to care for you.  This can help replace some or all of the income the caregiver may have to sacrifice in order to take on the caregiving responsibilities.  In addition, there is another valuable benefit to cash indemnity policies, long-term care services are likely to continue evolving in the future to meet the ever-changing needs people will face.  Thus, some will find more value with a cash indemnity LTC policy open to any and all care options without the need for approval from the insurance company.

TAXATION:  In terms of taxation, a “chronic illness” rider and “long-term care” rider are received tax-free for reimbursement benefits and up to indemnity limits (within IRC formula limits) established each year.  Your tax advisor should always be consulted for tax analysis based on one’s personal situation.  

CRITICAL ILLNESS RIDER (POLICY BENEFIT):    

A “critical illness rider” within a life insurance policy allows the insured / owner to accelerate a portion of the death benefit or a designated dollar amount upon diagnosis of one of several critical illnesses as specified in the contract.    Typically, the illnesses are heart attacks, strokes or cancer, which due to modern medicine are survivable.  A lump-sum benefit is paid upon diagnosis without restrictions on how the money can be used and can help you cover unexpected medical costs, experimental treatments, and other expenses.

There are different policy and benefit designs so make sure you understand the benefits, provisions, and limitations of these critical illness riders.  Click (Critical Illness).

TAXATION:  Neither Section 101(g) nor 7702B make any mention of benefits received for “critical illness,” and the tax implication of these accelerated payments is less than clear. However, there is some guidance by way of Private Letter Rulings issued by the IRS indicating that accelerated death benefits from a critical illness are received tax-free under other code provisions.  Your tax advisor should always be consulted for tax analysis based on one’s personal situation.

TERMINAL ILLNESS RIDER (POLICY BENEFIT):  

Before there were chronic illness and critical illness riders, companies added terminal illness riders to their policies at no additional premium charge.  These were the first of “living benefits” to be paid out in advance of a death benefit and were introduced around the time when AIDS was initially considered a terminal illness.         

An accelerated terminal illness rider pays a percentage of the face amount to the insured in advance of death.  Qualifying is based on a terminal illness or other qualifying medical events as defined in the policy when life expectancy is less than 12 months and a claim is approved.  A lump sum benefit is paid.  It can be used however one decides while providing dignity and peace-of-mind to the life insured.  These terminal illness riders are very common today and found in all types of life insurance products including term life insurance.  Premiums must continue to be paid to keep the remaining life insurance in-force.

NOTE:  Care must be exercised if loved ones will need the life insurance benefits more than accelerating the terminal illness rider in advance of death.  The amount you receive is subtracted from the amount that will be paid to your beneficiaries when death occurs.

TAXATION:  Terminal illness riders are usually received tax-free.  Your tax advisor should always be consulted for tax analysis based on one’s personal situation.

THE ADVANTAGES AND DISADVANTAGES OF HYBRID OR COMBINATION POLICIES
(CHRONIC ILLNESS, CRITICAL ILLNESS OR TERMINAL ILLNESS)

Should you have a health condition that might cause you to be declined for a traditional long-term care insurance policy, you may still be able to obtain a life insurance policy with these accelerated benefit features.

(1)  Accelerated benefit features are more limited than the benefits you could receive from traditional stand-alone or linked benefit long-term care riders.

(2)  Accelerated benefit features may not be enough to cover your long-term care costs. The benefit payments may be too low and the duration may be too short to cover your long-term care service needs.

(3)  Accelerated benefit features may not offer inflation protection.  If the policy does not include inflation protection, the benefit payment may not be sufficient to cover your future care costs.

(4)  You should consider whether using your life insurance death benefits to pay long-term care costs is the right option, or you may want to consider an additional life insurance policy.

(5)  There may be little or no death benefit remaining for your survivors if you use the accelerated benefit feature to pay for long-term care costs, and there is no way to extend the benefits once the life insurance face amount has been exhausted.

WHY DO INSURANCE COMPANIES AND CONSUMERS LIKE HYBRID OR COMBINATION BASED INSURANCE SOLUTIONS?

The insurance companies like these products because they know what their risk exposure up front.  Let’s assume the insurance company approves and issues a $500,000 life insurance policy.  They will pay out $500,000 one way or another and can underwrite and price the product accordingly with premiums based on your risk factors.  Remember, life Insurance is designed and priced to eventually pay a claim on every policy kept in force.  Plus many of these policies provide guaranteed premiums, meaning no rate increases, but depending on the company and product, not all premiums are guaranteed for the life of the policy.  They are projected to remain level and can change.

Consumers like these policies for the benefits and recognize the value they provide.

They know something will be returned to them for the premiums paid.

Paying And Keeping A Policy In Force

Consider having your premiums automatically deducted from your checking account so there are no issues with lost billing notices (U.S. Postal Service) or payments not received in a timely manner at the insurance company should memory issues arise in the future.

Make sure you indicate another person (secondary addressee) who can receive premium reminders should you become cognitively impaired in the future.  This will help against late payments or prevent a policy from lapsing due to nonpayment of premium.  You should receive a notice annually from the insurance company with the right to change your written designation to remove or add another person.

WHAT HAPPENS IF YOU CAN’T AFFORD TO CONTINUE YOUR STAND-ALONE OR LIFE INSURANCE BASED LONG-TERM CARE PREMIUM?      

You always have the right to reduce benefits, but you need to check with me or the insurance company first to see what options are available to you.

WHAT HAPPENS IF THE INSURANCE COMPANY RAISES PREMIUMS ON MY TRADITIONAL STAND ALONE LTC POLICY, AND I CAN’T AFFORD THE RATE INCREASE?

All insurers allow for benefit reductions to offset rate increases.  Articles are written that can mislead readers into thinking insurers are forcing people to drop policies without any options.  This is not true.

COMMON POLICY LIMITATIONS AND EXCLUSIONS:  

Benefits are not paid for…  

(1)  Services provided by a family member unless they are a regular employee of the care providing agency.

(2)  Services for which no charge would be made in the absence of insurance.

(3)  Services provided outside of the United States or its territories, Canada or the United Kingdom except as provided if the policy includes international benefits. 

(4)  Services provided due to suicide whether or not you had the mental capacity to control what you were doing, attempted suicide or an intentionally self-inflicted injury.

(5)  Treatment of alcoholism or drug addiction (except for long-term care resulting from alcoholism or drug addiction or for an addiction to a prescription medication when administered in accordance with the advice of your Physician).

(6) Treatment provided in a government facility unless required by law to cover the charges.

(7)  Treatment of an injury or sickness which would entitle you to benefits under any state or federal workers’ compensation, employer’s liability or occupational disease law, or any motor vehicle no-fault law.

(8)  Services received while this policy is not in force (except as provided in the Extension of Benefits section of the policy).

(9)  Services provided by a facility or agency that does not meet the definition for such facility or agency as described in the policy. 

(10)  Services provided due to an act of declared or undeclared war.

HELPING

You Decide - Two-way Street Sign

What To Consider And Helping You Decide Between A Traditional Stand-Alone Or Life Based (Linked Benefit) Long Term Care Insured Solution

I will start by saying there is NO ONE best solution.   They all have advantages and disadvantages, benefits and features unique to the insurance solution.   It’s what policy will work best for you when you add everything up.  

Here are some important questions to consider and ask yourself? 

(1)  WHAT IS YOUR PREMIUM BUDGET?  With newer plans being more expensive, fitting a long-term care insurance premium into a realistic budget is key.

You might consider premiums as a percentage of income.

You might consider a specific dollar amount.

You might want to consider a “good-better-best” approach can also help determine the best premium payment for you.

I will provide you with proposals showing you the different types of insured solutions focusing on a premium you can budget.

(2)  DO YOU WANT A GUARANTEED PREMIUM?  

How important are guaranteed premiums to you?  Traditional stand-alone long-term care insurance premiums are projected to remain level and are not guaranteed to remain level.

Because older polices have received rate increases does not mean newer products face the same risk.  In fact, the chances of rate increases on current standalone insurance are estimated by industry experts to be less than 10%.  Despite the lower chance of a premium increase on standalone products, this does not mean they will not increase.  If someone truly wants a zero chance of a premium increase, they will want to consider life-based long-term care insured solutions with guaranteed premiums.  Note some life insurance based products do not provide fulled guaranteed premiums.  

(3)  CAN YOU BENEFIT FROM DEDUCTIBLE TAX-ADVANTAGED PREMIUMS?     

Being able to deduct premiums can make a big difference in the after-tax cost to you for traditional stand-alone long-term care when it is treated as health insurance.  For non-business owners, premiums are only deductible for amounts above 10% of adjusted gross income.  However, people who have Health Savings Accounts can take money out of their account to pay long-term care insurance premiums.  Buyers who are business owners have special rules in regards to the deductibility of stand-alone premiums as a business expense.  Some life insurance based LTC plans with extension-of-benefit riders also allow policyholders similar tax treatment for plans that break out the rider premium.  Life insurance premiums are not deductible.

(4)  HOW IMPORTANT ARE INFLATION BENEFITS TO YOU WITH AN INSURED SOLUTION?    

This means your initial monthly benefit increases after year 1 and even if you’re on a claim to the maximum benefit period in the policy.

Companies for all types of LTC insured solutions have learned from past history and pricing mistakes that companies did not charge enough for the increased risk exposure they faced on annually increasing benefits, most common were the 5% compounding inflation increases.  All inflation benefits have become much more expensive and will substantially increase your premium cost.

An important question, how will you pay the difference between your monthly benefit amount and the future cost of services?  Are you willing or able to pay out of your income, savings, investments, or will your family pay for future long-term care costs?   Premiums will be lower, on the other hand, if you decline inflation benefits.

For more info, see “Helping You Understand The Cost of Care for Long-Term Care Services Now & In Your Future”.

PLANNING IDEA:  You may want to consider purchasing the maximum monthly benefit the company will issue.  This can provide an inflation hedge for you even though the cost of care in the future is likely to exceed this benefit amount. 

Are inflation benefits good to have?  Yes, if you can afford the additional premium cost.    However, if you can’t budget the additional premium cost.

Here is another question to too consider.  Will some coverage with no inflation benefits be better than no coverage in the future?  Today, there are alternative options to stretch future long-term care dollars and help make care needs more affordable to meet different situations in the future.   You might consider different inflation options with a shorter benefit period.    

(5)  HOW LONG DO YOU WANT BENEFITS PAID FOR LONG-TERM CARE SERVICES?  Remember industry average claims run 2 ½ to 3 years.  What no one knows will you have a below industry average claim, average claim or a claim that goes on for many years past the industry average?    

Are you okay with a 2 to 5 year benefit period?

PLANNING IDEA:  The shorter the benefit period the less your premiums.

(6)  TRADITIONAL STAND-ALONE LONG-TERM CARE INSURANCE POLICIES WAIVE YOUR PPREMIUMSAFTER YOUR WAITNG PERIOD HAS BEEN MET.    Some not all life insurance based linked or hybrid policies waive premiums when collecting long-term care or chronic illness benefits.  If not, premiums for the life insurance portion of the policy may need to be paid or the life insurance benefit can be lost.   

(7)  WOULD YOU WANT AN INDEMNITY (CASH) BENEFIT THAT PAYS FOR ALTERNATIVE TYPES OF CARE OR SERVICES SUCH AS AN UNLICENSED CAREGIVER OR FAMILY MEMBER?  

(8)  DO YOU NEED ADDITIONAL LIFE INSURANCE, WANT LIFE INSURANCE PAID TO A LOVED ONE OR A FAVORITE CAUSE IF YOU DON’T ACCELERATE ALL OF YOUR LONG-TERM CARE BENEFITS?      

(9)  WOULD YOU WANT TO LEVERAGE AN UNDERPERFORMING ASSET OR CD INTO A ONE PAY OR LIMITED PAY LONG-TERM CARE INSURED SOLUTION CREATING A LARGER BUCKET OF DOLLARS FOR FUTURE LONG-TERM CARE COSTS AND SERVICES?  

NOTE:  Life insurance based products tend to cost more than a traditional stand-alone long-term care policy.  A traditional stand-alone policy provides more options for flexibility and lower premiums.

Plan Ahead

And

Thinking Ahead

Why Sooner is Always Better?

ADVANTAGES OF PLANNING AT THE YOUNGEST AGE POSSIBLE

Chess - Evaluating Positions
Inspirational Motivating Quote On Sticky Note Paper With Cork Ba

Is it never too early to start planning in your 40’s with a long-term care insured solution?  Ask someone older who has to pay so much more in premiums or applied and just got declined? 

Long-term care planning with an insured solution can be considered an extension of planning for your future or retirement.  Why?  You’re adding and sending a substantial pool of money forward for future long-term care needs, and this is accomplished immediately upon being approved with a long-term care insured solution.

COMMON MISTAKES TO UNDERSTAND AND AVOID

(1)  Thinking “I’m too young”, or “I’ll deal with this later”. 

Many don’t realize that there are significant advantages to purchasing long-term care insurance earlier in life.

bigstock--184211425

The price of long-term care insurance is significantly lower when you’re younger with fewer underwriting problems.  Consider premiums in your 40’s or 50’s for the same policy cost significantly less than premiums at the age of 65 or 70.   Plus the earlier you consider an insured solution, the more likely your application will be approved and possibly at preferred premium rates.  Inflation options also cost much less.  In addition, the older you the greater likelihood health issues will arise when trying to obtain coverage.

(2)  Thinking this is “an older age problem”.  

Most people will need long-term care when they are older (often in their 70’s, 80’s or 90’s) but a growing number of younger people (even in their 40’s, 50’s and 60’s) now need care.

Thinking face with thought expression as vector icon with yellow background.

Do you know anyone who planned for their long-term care needs the day before they needed care?  People often don’t see the risk and by the time one needs care or the need came on quite suddenly, it’s too late to make plans with an insured solution.

Don’t ignore the risk and end up unprepared.   YES!  PLANNING DOES PUT YOU IN CONTROL OF YOUR FUTURE.

(3)  Your insurability, which allows you to qualify for a long-term care insured solution, can change at a moment’s notice.  One’s health status can shift quickly with a medical diagnosis, and it happens every day in doctor’s offices throughout the United States.  One day you’re insurable and the next day you’re not.  How would you feel if you wanted something, needed it badly, and couldn’t buy it at any price?  This is why proper insurance planning ALWAYS has to occur in advance of that medical diagnosis and certainly prior to the need for care.

APPLYING WHEN YOU’RE IN GOOD HEALTH IS KEY

By considering an insured solution at the earliest age possible, your health will never be better, and you increase your chances of qualifying at the best premium rate possible.  

A long-term care insured solution might seem expensive, but it solves so many problems compared to the steep cost of care when an unplanned long-term care event occurs creating additional problems and issues for everyone in the family.

THE TIME TO PLAN IS ALWAYS NOW!

Control Your Future words on a red arrow around a sphere of cloc

“The future doesn’t take care of itself unless you plan for it!”

By putting an insured plan in place, you will have more control over your future,
and it will make decisions for you and loved ones much easier going forward.

Marc Maretsky Personal Insurance Services based in Beverly Hills, serves all of California and the United States.  I help my clients acquire life, disability, long-term care, and critical illness insured solutions, as well as enroll them into Medicare when eligible.

“No matter how fast technology changes our world and everything around us.  I believe the personal touch and a human voice are more important than ever.”

The purpose of MY WEBSITE is to provide insurance concepts and ideas of interest to my clients, favorable introductions, other professionals or anyone else who may be viewing this information.  The content is general in nature and subject to change.  It should not be considered complete advice on any company, product or ideas described.  Your appropriate attorney, CPA or tax advisor should be consulted for legal or tax reasons regarding your personal situation.

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