This blog post is designed to provide general information on the subjects covered. It is not, however, intended to provide specific estate planning, insurance, tax or legal advice. Please note that LTC Consumer and its representatives do not give financial planning, tax or legal advice. You are encouraged to consult with your tax advisor or attorney concerning your own situation.

10 Questions to Ask Before purchasing Long-Term Care Insurance

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No one likes to think about getting older and experiencing any sort of health issues. However, life happens, and if we create a plan things can go a little easier. Asking yourself these ten questions can help you determine if long-term care insurance (LTCI) is a product that’s right for you and your loved ones.

1. What are the odds I’m going to need LTCI?

According to the US Department of Health and Human Services, 70% of people turning age 65 will need long-term care (LTC) at some point in their lives. That’s a large percentage and people are living longer, but they are experiencing more health issues later in life also.

2. Am I the right age to purchase LTCI?

In a perfect world, you would purchase insurance they day before you needed it. For LTCI you want to be young enough that you don’t have any serious health issues, but old enough that you’re not paying premiums for too long. Most people consider buying LTC coverage between the ages of 55-64.

3. Am I healthy enough to qualify for LTCI?

You will need to be in reasonably good health in order to qualify for LTCI. Policies are underwritten by insurance carriers and premiums are based on your age and health history.  We’ve provided an excellent resource for how to qualify, what underwriters screen for, and the most common reasons for decline.

Policies are underwritten by insurance carriers and premiums are based on your age and health history.
Policies are underwritten by insurance carriers and premiums are based on your age and health history.

4. Does my employer or any associations I belong to offer any discounted rates?

Check with your HR department and any associations you are a part of to see if they offer any sort of discounts or affiliation rates. You’d be surprised how many benefits are available to you that you’re simply unaware of.

5. Can I afford the premiums?

LTCI premiums are based on your age, health, elimination period, benefit pool, inflation, and many other items. We’ve provided a pricing example, however, we suggest contacting an LTCI Specialist to get the best estimate and an accurate quote based on your needs.

6. Would my policy be tax-qualified?

Current tax laws state that you may be eligible for tax breaks on premium of tax-qualified LTCI as it is considered a medical expense. We’ve provided a guide that breaks down eligibility requirements by state. Our 2019 Tax Guide should be coming out soon.

7. How much should I buy?

When considering the size of your benefit pool, you’ll want to take a look at the cost of care in your area. Then calculate how large of a daily or monthly benefit you’ll need, as well as any inflation options.

“When looking at LTCI options make sure you work with an agent who understands the product, focuses on educating you through the whole process, and sells only top-rated carriers with a history of paying claims.”

8. Could I afford a future rate increase?

While insurance carriers are doing a much better job of creating sustainable products and rates, there is still a chance that your rates could one day go up. With newer product the increases would not be as significant as in the past, and most carriers will allow policy holders to make changes to their policy in order to keep their premiums the same.

9. When do I receive benefits from an LTCI policy?

You are eligible for your benefits when a doctor has deemed you unable to perform two of the six activities of daily living – bathing, eating, dressing, toileting, continence, transferring – or when you suffer from a cognitive impairment. You would then have to pay for services during your elimination period, which is similar to paying your deductible. After that your policy will begin paying.

10. What’s the best place to purchase LTCI?

When looking at LTCI options make sure you work with an agent who understands the product, focuses on educating you through the whole process, and sells only top-rated carriers with a history of paying claims. At LTC Consumer our agents have decades of experience selling long term care products across the entire country.

 

Purchasing an LTCI policy is one of the smartest things you can do to protect your family and your retirement. Speak to a specialist today who can answer all your questions and help you find a plan that truly fits your lifestyle and your future needs.

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