The big risk "help might be needed" is scary so it's important to transfer it to a Long Term Care insurance company!
Many people plan for various events in their lives. Most however, do not plan on what to do if a change in health happens and then needing on going help. Taking action to do this and doing so early is very important. It provides advantages such as:
- A lower cost since the premium to enroll is higher each year you wait e.g. they can triple from age 50 to 70.
- More benefits can be bought for each dollar the younger you are. How? If you wait until age 55, you would have to invest in a bigger initial benefit pool, e.g. over $400,000, which would have a higher premium, to achieve the same protection as a person who bought an initial benefit of $250,000 at 45. The 5% compound inflation option, which increases benefits each year, adds this special value.
- A good health discount. It may be 20% or more. Plus a study by AALTCi, a professional association I'm actively involved in, 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%.
- A higher chance of being accepted. Another AALTCI study of 10 leading long term care insurance companies found up to 33% of individuals 60 to 69 lost their ability to invest in protection since they were declined because of health problems. The average rate of declines for individuals 50 to 59 was 13.9%.
What do people say who took action and made an investment?
- They did not want to burden family or others.
- They want to be in control so they can make their own decisions on the type of assistance and where it will be received.
What happens if you procrastinate on investing?
- If assistance were suddenly needed your savings would quickly go down, since the cost of long term services and support in Connecticut are some of the highest in the U.S.
- The premium will be higher. e.g. rates are 33% higher at 55 vs 50 and 60% higher at 60 vs 55!
- You may lose your ability to invest in protection because of a change in health and not being insurable!
- The predicted big shortage of help plus unknown inflation means the cost of this assistance most likely will grow even faster than the 6% or so increases experienced in recent years.
What are some reasons everyone has not invested in Long Term Care insurance?
- Most people think they are 10 or more years younger than they are so it's human nature to believe "I'm invulnerable" and it won't happen.
- Many indicate they will worry about it later since they are busy with work, self improvement, and fun.
- 54% believe MediCARE and 48% think their medical insurance will pay for assistance when it's required. They do not!
- Many believe buying this special protection is a mistake since it is expensive. The question thus is, which mistake do you prefer? Not making an investment and then becoming a big burden on family, after using up your savings nest egg, or investing and then not having to use it!
- Many believe MedicAID (welfare) will pay! It's purpose is medical coverage for the indigent. Yes there are various loop holes people use to qualify for coverage and regulations also allow individuals to protect things like a home and one auto. However, the important consideration is - MedicAID provides no guarantee coverage will be available if needed in the future! More information on the care available and who can use MedicAID.
If I pay premiums for a long time I may never get my money's worth?
- Investing in insurance is not the same as putting money in a financial investment where you hope to get your "money plus more back". Instead an insurance buyer, in return for paying a premium, receives a guarantee the amount of coverage purchased will be there if needed.
- If a 55 year old pays the premium for a Long Term Care insurance policy with certain benefits for five years all the money they paid in could come back in benefits in just 78 days! After paying premium for fifteen years they could break even in less than 5 months (143 days).
- Certain Long Term Care insurance plans provide professional care giving counselors as soon as a life changing situation happens and help is needed. They are independent from any service or support providers and meet with the individual and family to increase understanding of the assistance options in your area, to develop a plan for needed help, and to provide emotional support.
Ken Dychtwald, a leading authority on our aging population has stated planning was important and indicated Long Term Care insurance made sense to him because:
- Independence can be maintained and he did not want to burden children financially or emotionally.
- You can get quality care in the setting you choose.
- You stay in control of your money, retirement assets, and your life.
- Your spouse's lifestyle and financial security can be protected, while you're alive and afterwards.
- An inheritance for your children and grandchildren can be protected.
Want to Chat about gaining these values? I will get back to you if not available. You can also call John C Parker today at 860.739.0005 to set a time to visit and talk! The purpose of the visit will be to increase understanding with no pressure to buy.
John C Parker, has achieved professional designations as a Long Term Care Insurance professional and a Registered Health Underwriter. John is licensed to conduct business in CT (644135) and RI (1058420) and does not solicit or sell in other states.
This site shares insights from extensive involvement in professional associations, industry conferences, working with leading Long Term Care Insurance organizations, and individual research. These pages do not advocate a specific company or plan.