Have you read the news about Long Term Care Insurance (LTCI)? The cost of LTCI is increasing. And some companies are getting out of the business. Others are limiting claims. Why do you imagine that is?
It is really quite simple. Insurance companies have been caught by surprise with both the actual cost of care and the length of time that insured parties need it, which is greater than expected. The “advance” of medicine means that it is possible to keep people alive longer who have chronic illness, whether they are getting help at home or living in skilled nursing homes.
Greater pay-outs aren’t the only issue for insurers. They have also been stung by the reality that the cost of care is rising at an annual rate that is greater percentage rate than the insurance companies can safely earn as a return on the investment of the insurance premiums they collect from insured parties who may file future claims. Low interest rates have negatively affected premium costs.
If you bought LTCI a few years ago, you beat the rush and invested wisely. Make sure you keep up the payments! If an older member of your family has the insurance, make sure that they have named a secondary party such as you to receive a notice of cancellation for nonpayment. That’s the precautionary procedure so that family members can help dementia victims keep their insurance from lapsing. And if you have missed just a couple of payments, we can help you get it fixed and reinstated.
You can probably tell by now that I am really a big believer in LTCI. Several years ago, Marcia and I decided that buying it was probably the single most important thing we could do to make sure that we will never be a burden to our kids. When we bought it, we got “all the bells and whistles,” much like a consumer buying a “fully-loaded” luxury car, which by the way I have never done.
Recently, my enthusiasm for LTCI expanded to the point that I am now licensed for health and life insurance. I volunteered to go through extended training and testing so that I am now designated as Certified In Long Term Care (CLTC) and I access a wide range of well known insurers to that I am able to help our clients pick what policy is most economical for their needs. Stay tuned for future columns about LTCI. And call me if you want to learn how to buy and structure an LTCI policy that will either pay for your care, or if you die healthy without needing it, will pay a substantial death benefit to your children or favorite charity.
Dave Nesbit
Attorney