Insurance
LTC Insurance Can Be Durable
Planning for long-term care (LTC) is an important part of the overall planning process for most people. The need for care most often arises after age 80, while planning for that need should be done 20, 30, or even 40 years before that. If insurance is proposed as a way to pay for long-term care, a potential buyer of an LTC policy may wonder whether a policy purchased today will be effective so far off in the future.
Pleasanton Financial Advisors has discussed that concern with Allen Hamm, one of the nation's top experts on LTC planning. Allen says that careful choice of a policy can nearly eliminate that concern. The "exceptions" language of a proposed policy should be examined to see that no care environment is excluded from coverage. The absence of any such exclusion implies that the policyholder will be covered in any type of care environment, even if that type of environment has not developed yet.
Another policy provision that adds to the durability of LTC insurance coverage is an "upgrade privilege." That type of provision allows the insured to take advantage of new benefits or new benefit eligibility criteria that did not exist at the time of policy purchase. There may be additional cost to upgrade the policy, but it is nevertheless important to be able to continue an existing policy at favorable premiums based on a younger age at purchase. The alternative approach – purchasing a replacement policy to get the latest provisions – would be very expensive if many years had elapsed since the initial insurance purchase.
A final recommendation from Allen Hamm on acquiring a durable policy is to select an insurance company that is very strong financially and is committed to the long-term care market. An important test of a company and its reliability as an LTC insurance provider is the stability of the premiums charged to policyholders. A company that has never had to raise premiums to existing policyholders is the best choice for a consumer who wants a durable solution to a possible need to pay for long-term care in the future.