Recently, we sent out a communication that long-term care (“LTC”) insurance can be an affordable and effective solution. Here are some questions you may want to ask when considering LTC insurance.
• Who should own a policy to help offset the risks associated with LTC?
Generally speaking, the answer is, “it depends”. There are those who cannot afford it and therefore cannot purchase it. And, there are those who may be able to “self-insure” because they have a high net worth and/or significant income and do not necessarily need it. The best answer is to have a professional analyze your personal situation.
• What if I cannot afford the premiums for LTC insurance?
If you cannot afford the premiums or do not have adequate assets to prepay it, then you might be one of the many who will rely solely on Medicaid to cover any LTC needs. You need to know what that means for you and for your family and you want to research ahead of time how that works.
• If I can afford it and I think I should have it, at what age should I purchase a LTC policy?
There is no magic number. Normally, if you purchase it earlier in life, say at age 50, your premiums will be less than if you purchased it at age 60. However, the longer you wait, the more risk you are taking that something could go wrong with your health and you might not be approved. If you are over age 50, you may want to go through the underwriting process to see where you stand and to get a quote.
• What if I have a significant net worth or I have a significant amount of income every year – do I need LTC insurance?
There are alternatives to the traditional LTC policies, which have been popular for many years now. The problem with traditional policies is that if you do not use the benefits, you lose them when you pass away.
There are policies you can purchase that combine life insurance with LTC benefits to provide you with more flexibility. Not only do these policies provide a death benefit if you pass away before using the LTC benefit, you may also be able to increase the cash value over time or even be able to receive an annual dividend from the policy. Either way, these types of policies are generally paid up front.
In summary, most of our clients who are open to purchasing a LTC policy have either had to take care of a loved one who did not have it, or have watched a family member’s accounts being depleted because they needed care, but did not have coverage. In other words, they witnessed first-hand the need for adequate coverage.
There are many people who simply are not experienced with the issues surrounding LTC or even the probabilities of needing this type of care. Whether or not you are in the know, if you are between the age of 50 and 65 or know someone who is that age and does not have a LTC policy – contact us to get a quote. You will find out whether or not you qualify and you’ll become more familiar with the process and the costs of long-term care.
* All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. Investments in securities do not offer a fixed rate of return. Principal, yield and/or share price will fluctuate with changes in market conditions and, when sold or redeemed, you may receive more or less than originally invested. Therefore, no current or prospective client should assume that future performance or any specific investment, investment strategy or product will be profitable. For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither LPL Financial, nor any of its representatives may give legal or tax advice.