Why is planning, for what you want to happen in case of a change in health, important?

What do people want, if they have a change in health, and how can these desires be achieved?

Research indicates people of all ages do not want to burden family or friends but do want to make their own decision on assistance if help with day to day living activities is needed. The most effective way to have control and funds to pay for the help you want is to transfer the big risk of high cost Long Term Care services to a reliable Long Term Care insurance company.
Note: This insurance is especially important because the cost of desirable home care and assisted living is forcast to more than double in 15 to 20 years.

What are some reasons to take early action and buy Long Term Care insurance?

Acting early can result in a double discount. How?:

• It's significantly more economical to buy when younger since the premium is higher each year you wait to apply e.g. purchase rates can triple from age 50 to 70.
• The benefit pool in most Long Term Care insurance plans increases each year because the 5% compound inflation option is included. For example, if you wait until age 55, you would have to buy a bigger initial benefit amount, e.g. over $400,000, and pay for it at a higher rate, to have the same protection as a person who bought an initial benefit of $250,000 at age 45.

Are there other reasons to buy Long Term Care insurance early?

1. You may gain a good health discount. For example, a study by the professional association AALTCi reports 53.9% of people between 40 and 49 qualify for a good health discount. Between 50 to 59 it drops to 44.2% - 60 to 69 it's 31.9% - 70 to 79 it's only 18.8%.
2. Buying this special insurance does not mean health problems will not happen but it does show your love for family.
3. Buying Long Term Care insurance is the most tax effective way to pay for high cost assistance!
4. You can buy more extensive coverage for less money.

Bottom line - Taking action early means you can buy more extensive coverage for less money.

What are some reasons everyone does not buy Long Term Care insurance?

Even though 88% of people report being concerned about physical limitations in a later life stage, it's also human nature to believe "I'm" invulnerable so it won't happen. Then too:

• Most people think of themselves as 10 or more years younger than they are and since they are busy with work, self improvement, and fun they think they can buy protection later.
• Many (54%) believe Medicare and 48% think medical insurance will pay when they require assistance for an on going chronic condition. They do not!
• Many believe the government's welfare program Medicaid can be used to pay. It's purpose is to cover the indigent and it has many limitations.

What happens if a person procrastinates?

• If assistance is needed tomorrow they won't have protection and their nest egg may quickly run out.
• Funds would need to be withdrawn, most likely, from an investment. This results in 25% or more higher costs since capital gains and other taxes must be paid. Penalties may also have to be paid.
• A person who applies later will have to pay more e.g. rates are 33% higher at 55 vs 50 and 60% higher at 60 vs 55!

More information can be found on:

Long term care services and their costs - see the What's LTCi page.

The value of Long Term Care insurance - see the Value of LTCi page.

Connecticut employers - some points, to help understand the value in having Long Term Care insurance as an employee benefit, are on the LTCi in the Workplace page.

Want to talk about all this? Call John C Parker [860.739.0005]Its important to set up a plan so you won't burden family and can protect your nest egg.

Additional information on Long Term Care is on our education focused Learn More page.