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Pic courtesy of avamere.com
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The only ones who
want LTC coverage are the families who have been squeezed by very difficult
decisions in providing long-term care for a loved one or the agents who sell
the policies.
The issues surrounding
caring and paying for long-term illnesses are far more significant than issues
that we think about when evaluating the purchase decision. The factors
surrounding the purchase decision are frequently the odds of needing the
coverage, fear of the cost and alternative ways to get care if needed. When you
are feeling great and healthy, purchasing long term care insurance is an easy
decision to put off until next year.
Consider
forecasting your retirement under two scenarios. First is with the cost of paying
for coverage and the second would be the consequences of a full-blown long-term
health emergency. More likely than not, the later forecast will be gloomier and
cause you to investigate further.
Statistics show
that family caregivers on average hit the wall after about six months of
playing nurse. At the same time, their lives and everything else that they do
takes a back seat. That may sound acceptable to your daughter today. But she
may to have a different opinion after she sees how challenging that caregiver’s
role can be.
Regarding the
costs of providing care, there are direct costs such as doctors, nurses and
therapists, but also the indirect costs of lost wages for family caregivers.
In recent years,
I thought that LTC insurance will be as ubiquitous as health insurance is
today. But for seniors, that is not true. Premiums have been rising materially
throughout the past decade and underwriting has become more stringent. Most
policies leave the door open for future rate increases, which scares buyers.Options to contain the cost of LTC coverage are quickly dissipating. Limited pay policies have become very rare in the marketplace with only a few companies still willing to underwrite that risk. Return of premium policies still exist, but require a much larger premium outlay in order to generate the cash to fund the guarantee.
Insurance markets are constantly changing and evolving. The outlook for LTC insurance still calls for rising premiums, and should cause anyone concerned about the impact of long term illnesses to take another look.
John
P. Napolitano is CEO of U.S. Wealth
Management in Braintree, Mass., and 2012 president of the Financial
Planning Association of Massachusetts. He may be reached at jnap@uswealthcompanies.com
or on Facebook as JohnPNapolitano
and US
Wealth
John Napolitano is a registered
principal with and securities offered through LPL Financial. Member FINRA/SIPC.
He can be reached at 781-849-9200.
Securities offered through LPL Financial, Member FINRA/SIPC.
Investment advice offered through U.S. Financial Advisors, a registered investment advisor and separate entity from LPL Financial. The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with resident of the following states: AL, AR, AZ, CA, CO, CT, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MN, NC, ND, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, VT, WA, WV. USFA, and U.S. Insurance Brokers, LLC are wholly-owned subsidiaries of U.S. Wealth Management. U.S. Wealth Management companies are not affiliated with LPL Financial.
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Securities offered through LPL Financial, Member FINRA/SIPC.
Investment advice offered through U.S. Financial Advisors, a registered investment advisor and separate entity from LPL Financial. The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with resident of the following states: AL, AR, AZ, CA, CO, CT, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MN, NC, ND, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, VT, WA, WV. USFA, and U.S. Insurance Brokers, LLC are wholly-owned subsidiaries of U.S. Wealth Management. U.S. Wealth Management companies are not affiliated with LPL Financial.
The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.
