The Right Time to Buy Long-Term Care Insurance

The older you get, the more likely your chances are of requiring some type of long-term care assistance. And because you know that the cost of even just a few years of long-term care can easily wipe out your life savings, you're thinking about buying long-term care insurance (LTCI).

For the most part, deciding when to purchase LTCI will depend on your age and your ability to pay the premiums. Since premiums are based on your age at the time you purchase the policy, the younger you are when you purchase LTCI, the less expensive your premiums will be. However, there's a tradeoff. If you purchase LTCI early, you may be paying premiums over a long time period.

So, just when is the right time to buy an LTCI policy? Although insurance companies will write an LTCI policy for anyone between the ages of 40 and 84, most people purchase LTCI when they reach their 50s or 60s. That way, they won't end up paying significantly higher premiums because they waited too long to purchase a policy.

Should you purchase an LTCI policy?

Deciding whether you should purchase an LTCI policy depends on your individual circumstances. However, you may want to consider purchasing an LTCI policy if some of the following criteria apply:

• You are between the ages of 40 and 84

• You have significant savings and other assets that you would like to protect

• You are in good health and thus insurable

• You can afford to pay the premiums now and will be able to afford to pay the premiums in the future

LTCI policy features

The following is a list of common LTCI policy features. Some are part of the standard policy, while others are available as options and riders at an additional cost.

• Coverage for skilled, intermediate, and custodial care

• A choice of where care is received (e.g., private home setting, adult day-care setting, assisted-living facility, nursing home)

• Trigger of benefits when activities of daily living cannot be performed independently (e.g. bathing, toileting, eating)

• Guaranteed renewable provision (the policy cannot be canceled)

Inflation protection

Waiver of premium provision (premium payments are stopped while the beneficiary receives benefits)

"Free look" provision

Respite care coverage

Grace period for late payment

Third-party notification of missed premiums

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Long Term Care and Long Term Care Insurance? Your Chances and Your Costs

Clearly, you don't want to dwell on an image of you or your spouse in a wheel chair or nursing home, but if you don't plan ahead now for such eventualities, you could end up with a crippling financial burden that can strip a family of it's entire nest egg.

Funding for eventual long term care must be planned for far in advance, and long term care insurance seems to be the tool of choice. The alternatives really suck by comparison, so it's time to get going to put your plan in place while you still can.

Fact is, there is nearly a 50% chance that during retirement, due to medical conditions or extended longevity, a person will eventually end up requiring 24-hour skilled nursing care in a long term care facility.

Another astounding fact is that more than 40% of nursing home residents are under age 65. In truth, at age 57, due to advanced Multiple Sclerosis, I myself would be in a care home if my wife would let me out of her sight.

And now let's look at the average length of facility care plus the projected costs for that care…

Long Term Care - It's Leading Causes & Average Lengths of Nursing Home Stays ( from Financial Planning News ):

Alzheimer's: 96 months
Diabetes: 48 months
Pulmonary: 36 months
Cancer: 36 months
Stroke: 21 months
Cardiac:16 months

What happens if you don't have long term care insurance, but you do need this long term care?

Well, at room rates of $300.00 per day, if care costs inflate at least 5% annually, then 10 years from now, the average, Alzheimer's, long term care stay in a private room could cost a family over $1,400,000.00+

Do you want your family to pay THAT out of savings? I don't think so, and long term care insurance is clearly the only sensible answer, but is long term care insurance too expensive?

Long term care insurance can cost from under $100/mo. to over $1000/month, so sure, at first insurance can seem expensive, yet consider this:

At 5% annual compounded inflation, in 10 years, actual real-life care costs could mount to well over anything you might ever put into long term care insurance. Just do the math.

The annual long term care insurance premium investment is often less than the actual cost of just ONE MONTH in a care situation.

NOTE: Recent industry articles indicate that long term care insurance is such a valuable planning tool that financial advisors may face legal action if they neglect to at least recommend consideration of coverage. (Trusts & Estates Magazine)

Long term care insurance may make good financial sense for you and yours, and the early bird gets the worm, because the lowest long term care insurance prices are locked in at the younger ages and are designed to remain level thereafter.

In any case, each policy is designed to custom fit your circumstances, so you have to work with a trained long term care insurance specialist in order to create the optimal coverage plan. You'll want a multi-company broker who can compare companies and policies to find the best long term care insurance plan for your unique situation.

By: Clay Cotton

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Introduction to Long Term Care Insurance

There are many different forms of insurance available to the average person. Long term care insurance is designed to take in the cost of an aging society.

Of all of the various elements of the personal financial planning process, risk management and insurance is both the least enjoyable to consider and the most important to consider. There is nothing as certain as the uncertainty of life. No matter how much money you are earning or how wisely you are investing it, a sudden disaster can knock all of your careful plans over like a stack of blocks. Insurance is the most common method of managing these uncertainties and making sure that yourself and the people who depend on you are protecting as much as is possible.

The most common forms of Insurance are Life Insurance and Health Insurance. People feel they are fairly well protected with these against either illness or death. There is an area in between illness and death, however, that needs to be considered. This is the need for long term care. Long term care is usually defined as the need for assistance in performing the basic functions of life such as eating, dressing, mobility, etc. The problem is that most Health Insurance Policies will not provide coverage for long term care. The person is no longer suffering from a medical problem, but can no longer properly care for themselves without assistance.

In the United States, Medicaid will pay for this assisted living if the person has no funds or other means of paying. It is the person with assets who is in trouble. The cost of assisted living is high and can quickly eat away the savings and funds that were intended for other purposes. This is the basis for Long Term Care Insurance. It is a policy that is designed to provide the funds needed to pay for this assisted care so that your other assets can continue to do what you intended them to do.

Long Term Care Insurance Policies are generally sold by the same Companies that provide your Life Insurance Policies. Indeed, there are some Life Insurance Policies that have provisions for a certain portion of your death benefit to become available in the case that long term care becomes necessary. In other cases, the Long Term Care Insurance policy is a separate contract that has its own restrictions, exclusions, and benefits. The costs of the policies will vary depending on a number of factors. The age of the person purchasing the policy will be one of the most important considerations. It will normally involve a Medical examination also to determine the premium rate.

Your Insurance Agent can explain the benefits and the costs. It is important to understand what would be covered and what would be excluded in the same manner as evaluating a health insurance plan. It is also to remember that it is estimated that almost 40% of the people that require paid assisted living and long term care are between the ages of 18 and 65. Although many people think of long term care as a need of old age, this is not always the case.

By Barry Waxler

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How to Understand Health Standards for Long Term Care Insurance Enrollment

Long term care insurance conforms to the basic insurance mechanism, in that the individual risk of future peril is shared by a pool of people who currently are free from that peril.

The insurance pool is represented by the insurance company which sets eligibility standards for enrollment to ensure a hazard-free pool, so that actuaries can calculate reasonable, standardized premiums for pool members who meet the eligibility requirements and enroll in the risk pool. In this way, members transfer their individual risk of peril to the pool. The pool shares the risk for all members and covers those whom actually experience the future peril.

If you are thinking about applying for a long term care insurance policy, please be aware that certain pre-existing health conditions can make it impossible for some folks to enroll due to health reasons. If you have any health issues, this article can help you better understand long term care insurance health requirements.

Do not apply for long term care insurance if you CURRENTLY:

* Use a multi-pronged cane, crutches, oxygen, walker or wheelchair

* Require assistance with bathing, dressing, feeding, toileting, urinary or bowel continence, or transferring between bed or chair

* Use/need home health care, adult day care, assisted living or nursing home care

* Require assistance with grocery shopping, use of transportation, use of telephone or banking

( NOTE: These pre-existing health problems may make you uninsurable for buying a new long term care insurance policy. However, all the above health conditions WILL be covered if they occur AFTER you you have purchased your long term care insurance policy. )

In addition, do not apply for long term care insurance if you CURRENTLY have:

* AIDs or HIV infection
* Alzheimer's
* Amyotrophic Lateral Sclerosis (ALS)
* Cystic Fibrosis
* Dementia
* Hemophilia (other than Von Willebrand disease)
* Hepatitis C, Non-A, Non-B, or Autoimmune (Active)
* Kidney Failure
* Liver Cirrhosis
* Memory Loss
* Multiple Sclerosis
* Muscular Dystrophy
* Paralysis
* Parkinson's Disease
* Post-Polio Syndrome
* Schizophrenia
* Sickle Cell Anemia
* Systemic Lupus Erythematosus

Every long term care insurance company has their own health underwriting standards. Each company's health underwriting standards may vary by state, according to each state's laws.

Note: As you increase in age, so does your risk for health issues. Therefore, most long term care insurance companies will require medical records for people over 45, medical records and phone interview for people 50 and over, and medical records plus a face-to-face health interview for people over 70.

Be aware: If you think you can slip your health issues past long term care insurance underwriters, then think again. First, lying on your application is fraud. Second, it is the underwriter's job to be very thorough when looking through your medical records and assessing risk. Be honest with yourself and with the long term care insurance company you choose.

The upshot of all this is that folks must protect themselves while they are still in good health.

If you fall within acceptable guidelines, then "congratulations", as you can protect your assets and your family's lifestyle stability now, then cross your fingers and hope that you are not one of the nearly 45% of us who will need care at some point in our lives.

Article Source: http://www.ApprovedArticles.com

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Hot New Product - Long Term Care Annuities

In the next few minutes you will learn about a new insurance industry product that provides long term care insurance coverage if you ever need it, but requires no policy, premiums or health qualifications.

Why Seniors Don't Buy Long Term Care

1. In my experience, over half the people who shun long term care insurance do so because they feel they will never need it. It is difficult to visualize going to a nursing home. Statistically, half of these people will be right.

However, there are a number of scenarios where the person may need some kind of assistance but never see the front door of a nursing home. In fact, most people who need long term care can receive care without ever leaving their home.

When you stop and think about it, the decision not to buy long term care insurance is a decision to self insure. This can be costly and possibly devastating.

The average cost of a nursing home today is $80,000 per year and rising. At that rate, it doesn't take but a few years to grind through a modest estate. If both the husband and wife need nursing home care, the time to dissipate an estate is cut in half.

A person can spend 40 years in a career building a retirement nest egg. They spend another 40+ years conservatively managing their money while trying to keep up with inflation. If they need to go into a nursing home during the last five years of their life, it all could be gone quickly.

It doesn't have to be that way as you will soon see.

2. Many people think long term care insurance is too expensive. They may be right.If a person waits too long to apply, they may have sticker shock. The rates are based on age.However, long term care comes with a lot of bells and whistles. When you strip away some of the options that may be nice to have, but not essential, the premium is a lot lower.

If a person looks at a plan that covers home health care only, the premium is lower yet. This takes care of the 50% who never will need to go into a nursing home.

The only thing better is coverage without a premium, which I will get to in a minute.

3. Most people react to a problem only when the problem surfaces. If a person waits to apply for long term care insurance until they are experiencing health problems, any long term care insurance plan may be prohibitively expensive or altogether unavailable.

The Solution: The Long Term Care Insurance That is Not a Policy

The insurance industry is very competitive. This very competition engenders new thinking and creative policies. Enter "Long Term Care Annuities."

There are only a few companies offering this product and the structure differs from company to company. To give you a general overview of the concept and mechanics, I am going to describe the main aspects of one carrier's contract. Check with your financial planner for all the options.

The underlying base of an "LTC annuity" is an annuity. Nothing new here; annuities have been around for a hundred years. They are safe, the funds accrue at a competitive interest rate, and the account grows tax-deferred.

To form an LTC annuity, the insurance company has built in a "long term care option." It is not a rider. There is no premium. It is simply an option you elect if long term care is ever needed. Sweet.

To qualify, a person only needs to lose two of six ADLs (activities of daily living). ADLs are insurance companies' method of determining the qualification for levels of care. They are eating, bathing, dressing, toileting, transferring (walking) and continence.

The person doesn't have to be in a nursing home. They simply need to have demonstrated the inability to perform two of the six ADLs to qualify to put the long term care option in their annuity in action.

An Example

If a male, age 60, places $200,000 into an LTC annuity, assuming a conservative interest rate, the policy would grow to $300,000 in ten years. If the $300,000 were converted into a life income, the person would receive $2,200 per month for the balance of their life. An 8.8% return. Not too bad, considering it is guaranteed no matter what.

If this person needs long term care at age 70 by virtue of losing two of six ADLs and elected the long term care option, the life income would jump to $4,500 a month.

Conclusion

These new products, long term care annuities, provide the option to receive long term care benefits only if they are needed. There is no separate long term care insurance policy, no premiums and generally little or no underwriting.

Now there are no excuses. Those who feel they will never need long term care will simply never exercise their LTC option. Those who find long term care too expensive have an alternative with no premiums. Moreover, those who have health issues can obtain long term care benefits, as underwriting is simplified or non-existent.

By Robert Cavanaugh

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Congress Scrutinizes Long Term Care Insurance

Conseco and Penn Treaty Long Term Care insurance companies must be biting their nails to the quick, as the House Committee on Energy and Commerce breathe down their necks and the General Accountability Office closes in.

Conseco hired a great ad agency. I loved their long term care insurance commercials. They were so funny! Yet every time I watched them, I couldn't help but cringe. My concern was that people would buy a Conseco policy, then perhaps someday their rates would go up, or worse yet, their claims might get denied. Clay and I knew that, as far back as the 1990's, Conseco was selling relatively inexpensive policies to lots of unhealthy people. Now, approving "sickies" for long term care insurance seems compassionate, doesn't it? Of course it does. I sure wish companies would approve more, but that's not how insurance works. Companies with smart actuaries know that insurance can only work when there are more "low risk" policies sold, than there are "high risk" sold. That way, more money is coming in than going out. More premium payments, less benefit pay-outs. That's how the "pool" of money held by insurance companies stays strong.

When the high risk/low risk ratio is reversed, the money pool is in danger of drying up. That was the problem we saw, way back when. Clay never sold Conseco. He was advised not to by his mentor, but he did sell a few Penn Treaty policies to people who, due to health concerns, would not have been approved by other companies.

Penn Treaty had decent policies, yet Clay always told his clients that there was a good chance their premiums would go up in the future, due to Penn Treaty's high risk/low risk ratio and lower premium prices. Still, given the choice between having no LTC insurance at all and the possibility, no matter how great, of rate raises most people chose the insurance. Would Clay have made the same choice if he had the chance of being insured. You better believe it"¦ He would buy a Penn Treaty policy today if they would take him.

Even so, I think it's high time the long term care insurance industry got a good once over. Rate raising and refusing to pay-out, if only from a few companies, damages the entire industry, not to mention consumers' well being. If you diligently pay your premiums, year after year, and you have a legitimate claim, you should expect the LTCi carrier to pay-out, as per your contract. Paper shuffling and other foot dragging techniques being used by a few insurers are shameful.

Why has Congress waited so long to look into this situation? Was the Insurance lobby too strong for the last Congress? It may be political "low-hanging fruit" to rail against the Evil Insurance companies during these pre-election days, but I'm glad that Obama and Hillary have the moxy to do so. The states haven't been doing a great job regulating, so maybe this will get their tails in gear.

One last thing: 81 year old Mary Rose Derks has gotten a lot of press. She's been in a nursing home since 2002 and her long term care has cost her $70,000 or so. Articles and news shows site her case, claiming that Conseco has not paid her claim. I'd like to know where her LTCi agent has been all this time. Isn't he helping her, fighting for her?

It's easy to get alarmed. Yet we don't know what Mary's policy's contract wording was, so we don't know if Conseco is in the right or if Mary Rose Derks has a valid claim. There could be legal wording in the policy itself that allows Conseco to not accept her claim. Conseco might have found that Mary didn't disclose all of her health conditions when she applied, therefore, nullifying her contract. Or not. Maybe Conseco is simply trying to save a buck at the expense of a fragile, little old lady. We don't know. We only hear the plaintive cries of her family so eagerly repeated through the Media.

But I bet Conseco wishes they had spent less on advertising and more toward paying their claims now!

And let's remember: Long Term Care Insurance companies pay out Billions of dollars in claims. Most LTCi companies should be applauded for helping Americans during times of great stress and need.

By: Clay Cotton

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What are Life Insurance Ratings and How are They Used?

In order to determine the price you will pay for your life insurance, agents use what are know as life insurance ratings. There are two types of life insurance rating. One is flat rating and the other is called table rating. Underwriters use an industry standard underwriting manual to determine how to rate certain health conditions.

A flat rating, for example, might be used for a short period of time for somebody who has just undergone a medical procedure like surgery. On the other hand, somebody with a more chronic condition such as high blood pressure or diabetes might receive a table rating. Table life insurance rating is based on a percentage of the premium.

The life insurance rating you receive, as stated above, is determined according to industry standards. If you disagree with your life insurance rating, let your agent know. He or she might be able to have it changed. Yet you could have to have additional medical exams or questions to prove that you are eligible for a medical rating.

When you shop for a term insurance rate, quotes could vary from company to company. That's why at Spectrum Direct, we make things easy for our customers. We will do all of the legwork for you, gathering information from various life insurance companies to ensure you receive the best term life insurance rating and the lowest premiums according to your rating.

Your term insurance rate could vary according to your age, gender, and how much coverage you need, among other variables. Your term insurance rate can also be affected by your occupation, although term insurance is still the least expensive form of life insurance. We can also gather multiple quotes for you, to see what different amounts of coverage would cost. We have a very high term life insurance rating within the industry, so rely on our superior reputation for quality products and outstanding service. Visit our site today for a free instant quote.

By : term-life-insurance.spectrumdirect.com

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