Answers in Long-Term Care Insurance

While all the above answers are excellent, many companies, after seeing the true cost of long term care, have changed the way their contracts are written. More often than not , of late, I'm seeing policies that are tied to a "bucket of money" benefit. You still choose a daily, weekly, or monthly benefit, and it should cover in-home as well as facility charges. But, instead of just having a "number of years" benefit, the contracts would be based on a "maximum charges" benefit. I'd definitely find a local Financial Advisor who is licensed and experienced with Long Term Care. The industry is changing, and you need to find someone who you can trust in making these decisions. Rod Miller, CFP, CLU, ChFC

Hi Harrison! Long-term care presents such a challenge - there is no one best answer. Each advisor here has a good perspective on the questions to ask factors to consider. My initial advice is to take care of your health now. Change to a low-sodium diet with little processed food, drink lots of water, and exercise. Here's the downside of that: if you have a healthy body and need long-term care for dementia, you may outlive your policy coverage or amounts. It's a catch-22 with a complex product, so be sure to consult with an expert.

I recommend:

1) Three years of coverage. 2) Researching the average per day cost in your area. The annual average is about $200 per day. 3) Inflation protection 3-5% every year. The higher the better. 4) A comprehensive plan that covers home care, assisted living, and nursing home.

The correct age is when you start your retirement planning. You will realize that health care costs are enormous. The figure used in calculating the amount of assets required to fund long term care is $230,000. Once you review your assets and projected income at retirment you have to decide if you want to insure all of the $230,000 or portion of it. If you are in the "I can't fund any of it from my assets or income" group; then the sooner you seek coverage the better; as the cost of waiting is always higher when you get around to it.

When I first started selling LTC insurance in the mid 1980's the average age of a buyer was something like 72. Today it has fallen dramatically and is below age 60. My recommendation is, the sooner you can afford to buy it the better. Rates will be very affordable at your age and there are a substantial number of "young" people now getting benefits from their LTC policy, usually due to a catastrophic accident causing a traumatic brain injury or spinal cord injury. LTC insurance is not just for nursing home care. Even better, if you buy it today vs. buying it when you are 55, you will pay less in premiums by the time you reach age 80 by buying it today just do to the higher cost at older ages.

Auburn, Normally look at Long term Care at age 45-65. When ready take a look at not only traditional Long term care insurance but also the Hybrid products available. There are companies that offer guaranteed Universal Life products with an annual premium with a Chronic Illness Rider. These Policies allow you to access the face value in advance for LTC needs. The others allow you to take assets and realocate a lump sum to a UL product and provides you with a multiple of Life insurance and Long term care buckets. Thus no premium increases! These products I believe will be the future of Long Term care Planning as more and more inusurance companies are getting out of the market, ie MetLife, Prudential.

I would say the sweet spot to purchase Long Term Care Insurance is in your early to mid 50's. However, with that being said, the premiums on a Long Term Care Insurance policy are lower by age. Also, the need for Long Term Care Insurance could potentially happen at any time (for example, if you were hit by a car and became paralyzed). I have also seen certain disease like Alzheimer’s and Dementia hit people at a younger age. The point is, you never know if and when you may need assistance. If you have the cash flow at an earlier age, it doesn't hurt to take a look at it younger. Please keep in mind Insurance companies alone determine insurability, and some people, for their own health or lifestyle reasons, are deemed uninsurable.

Melissa Levin, CFP®, CFS CA Insurance Lic #0C56086 714-547-8787

Due to industry regulations, the advisor may not post additional reply comments. If you would like to contact the author, please email her at Melissa.Levin@lpl.com. Melissa Levin is a LPL Registered Representative with, and securities offered through LPL Financial, Member FINRA www.finra.org /SIPC www.sipc.org The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

In order to calculate how much long term care insurance you will need, I recommend you find out what the average cost of care in your neighborhood is.

You also may want to account for inflation - we believe these costs are going to increase. You may want to look for a policy that has a compound increase rider (this means the benefit you elect will increase annually - compounded.... but more of a benefit than "simple" increase).

Riders are additional guarantee options that are available to a long-term care insurance contract holder. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policy holder should review their contract carefully before purchasing. Guarantees are based on the claims paying ability of the issuing insurance company. In addition Insurance companies alone determine insurability, and some people, for their own health or lifestyle reasons, are deemed uninsurable.

Melissa Levin, CFP® CA Insurance Lic #0C56086 714-547-8787

Due to industry regulations, the advisor may not post additional reply comments. If you would like to contact the author, please email her at Melissa.Levin@lpl.com. Melissa Levin is a LPL Registered Representative with, and securities offered through LPL Financial, Member FINRA www.finra.org /SIPC www.sipc.org

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

I'm sorry for your loss. I don't sell Long-Term Care Insurance, or any products for that matter. As a financial planner, I know the cost of medical and long-term care is one of the greatest wild cards in our financial future. You've lived through it already in your Mother's case. So, you know first hand. So, if you believe in using insurance to transfer some or all of such an unpredictable risk, I suggest you insure yourself at the upper end of the benefits scale. This means you should find out what it costs today for care that meets your needs and comfort level. Go for a daily benefit at the higher end of the scale, perhaps even a little more. Add inflation protection. And, choose a provider with a long record of premium stability. For some, this means you should purchase as much as you can afford. For others, this means buying LTC insurance like you buy your house or your car - go for the best model available.

Harrison, Each situation is diffrent and Long Term Care is a very complex product that can be structured endless ways- in terms of benefit amount, waiting period, benefit period and numerous optional riders ( add -on's). You need to work with a specialist directly. Feel free to call me at 917.696.0674 or E-mail at evan@completeadvisors.com. I can help. Thanks.

Well Harrison, great question, but to be accurate, we’d have to know what the future inflation rate for those services was. Many older policies issued offer an inflation rider that increased the benefit from the date of purchase by 5% each year. When I first started selling those policies, nursing home costs were going up by 7-8% a year. Back then, the daily average cost was $170 a day, so we often started with a $200 a day benefit to adjust for the smaller annual increase that would occur compared to inflation. But the past couple of years, nursing home costs have flattened a bit and the inflation rider is providing more benefit than required.

These days, most carriers simply offer an inflation rider tied to the CPI. But that doesn’t ensure you will also be able to keep up. The cost of care will surely differ from CPI from year to year. You can overbuy your daily benefit today, but if you acquire a daily benefit consistent with current costs and a CPI rider, you should be fairly close to what is actually needed.

Dear Auburn, Conventional wisdom is to consider this insurance in your 50s - assuming there are no health issues that prevent you from being underwritten at that time (and no one can predict the future!). Remember that paying for this insurance sooner means lower premiums but many more years of premiums. BTW, I recommend you always add the maximum 5% compound inflation to any policy so this doesn't become a rapidly shrinking band-aid.