By the time you turn 40, you should have saved some money for your future retirement. The problem is that many people forget to protect those retirement funds from the high costs of long-term care. The US Department of Health and Human Services says that if you reach the age of 65, you have a 70% chance of needing some type of long-term care service. Health insurance, Medicare, and supplements will only pay for a small amount for specialty services and for only 100 days. They will pay nothing for the custodial services (help with activities of daily living) that most people will need as they age.
Often times this means crisis management. Family members become caregivers. Caring is difficult, but when a family member must be a caregiver, it adds more dimensions. This generally means that the responsibility falls on the lap of a daughter-in-law. They generally have their own professional and family responsibilities. Not to mention the emotional difficulties that bind a family member as a caregiver.
The financial costs and burdens of aging will affect your savings and your family. Affordable LTC insurance will protect your assets and ease the burden on the family.
There are very few true specialists in long-term care insurance. This means that you should seek the help of a true long-term care specialist. This person must have at least three years of long-term care insurance experience, represent major insurance companies, and have at least 150 long-term care insurance clients.
Most financial advisers and general insurance agents do not have the skills to design an affordable plan based on your specific needs. Also, they generally don’t understand the underwriting requirements that each insurance company uses to determine whether they will even offer you a policy. They have generally never experienced a claim so they do not fully understand how these policies are used at the time of the claim.
That is why I help consumers across the country using my unique process where a customer views my computer screen while we are on the phone. Several other top specialists will do the same. The key here is to ask lots of detailed questions about your health, family history, retirement plans, and concerns. Most financial advisers and general insurance agents can ask only a few questions. This means that the recommendations they can give you are not appropriate and may even cost you more money than they should.
Since they are not exclusively concerned with long-term care planning, they generally do not understand the products and the positive impacts they can have on their loved ones. They also tend to overinsure. A true long-term care specialist will make the right recommendations and consumers will find that LTC insurance is very affordable and adds a great deal of peace of mind when planning their future retirement.
If you are talking to someone about long-term care insurance, be sure to ask a few questions:
How long have you been working with long-term care insurance?
According to the American Association for Long-Term Care Insurance (AALTCI), less than three years are not accepted.
How many clients do you have with LTC insurance?
No less than 100 is acceptable, says the AALTCI.
How many companies does it represent?
The AALTCI says no less than three.
How many claims have you been involved in?
The more the better, keep in mind that a person who works three years may not have had any claims yet despite having more than 150 clients. Ideally, you want a person who has more than 15 claims.
What is your general philosophy when designing a long-term care insurance plan?
Listen to how they answer the question and make a judgment if it seems to be well thought out.
Here are some warning signs to watch out for:
1. The agent or advisor sends you quotes without asking you many questions. A true long-term care specialist will spend a lot of time asking detailed health and family history questions, as well as asking you about your future (or current) retirement plans. If they only take five minutes or less, you must flee.
two. The agent or advisor immediately starts talking about hybrid or asset-based plans without asking you many questions. These are life insurance or annuities with riders for long-term care. They can be a great way to plan for some people, but anyone who gives you this kind of solution without asking a lot of questions should be avoided.
3. The agent or advisor does not explain the Long Term Care Partnership Program. Not all states have active partnership plans, but most do. If they don’t mention it, be sure to ask. If they can’t explain it, move on.
Four. The agent or advisor does not have a website, or their website has very little information available, usually not a good sign. True LTC specialists usually have a comprehensive website with many resources available for education.
5. The agent or advisor suggests that you insure yourself and put money in investments. For most people, this puts their money at too much risk, does not provide tax benefits, and does not reduce the burden on the family, as most LTC policies have case management. It may earn the advisor money, but you should be more concerned about how you protect your money and reduce the burden on your family. If they make this kind of recommendation, ask them to put it in writing. Then ask how your plan would actually benefit you and your family from the financial costs and burdens of aging.
Long-term care insurance has become a key part of retirement planning. Find a specialist to help add peace of mind to your plan. It’s an easy and inexpensive way to help you have a successful retirement in the future.
Working with a long-term care specialist will allow you to get the accurate information you are looking for. There are several reference websites for research:
LTC News offers articles and resources: http://www.ltcnews.com
US Department of Health and Human Services.: https://longtermcare.acl.gov/
Long-term care will affect you, your family, your savings, and your lifestyle. Long-term care insurance is easy and affordable asset protection. These plans not only protect your savings, but they reduce the burden on family members. Take action before you retire to take advantage of lower premiums and improve your overall health.