From the American Association for Long-Term Care Insurance (2008 LTCi Sourcebook), 8 million Americans currently own long-term care protection; however, only 180,000 individuals received claim payments. That is only 2%.
So, the Long-term Care insurance salesman will tell you that you have a 50% chance of needing long-term care but not mention the above statistic. Is it accurate? Even a stay of 2 weeks (for knee surgery rehabilitation covered possibly by your medical insurance), is included in the 1 out of 2 who will need long-term care numbers. So be careful.
When is the best time to buy Long-term Care Insurance? The longer you wait the more the risk that you will not be insurable. Age 50-59, 13.9% were declined coverage and from ages 60-69, 20-33% were declined coverage.
However, at earlier ages, you must consider that inflation protection riders based on the CPI may not keep up with actual inflated costs of long-term care. At age 49, for example, you may not need that coverage for 40 years or more. If the CPI averages 3% but long-term care costs actually increase at an average of 6-8% (as they do now), then your coverage will cover less than 50% of that future value. In other words, you are better off than having no coverage but still very under-insured. What to do?
Consider Future Buy-Up Options. The answer may not be in inflation-protection but rather in the ability to increase coverage every 3-5 years without medical underwriting.
If married, Shared Care Option, allow both spouses to share a single benefit over both lifetimes.
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.