Consider Getting Long-Term Care Insurance Before it Isn’t Offered

With nursing home care in some parts of the country costing as much as $10,000 a month, a long-term need for care can deplete even the best-planned estate. As a result, many seniors buy long-term care insurance to cover this risk. One great advantage of this insurance is that most policies now cover home care and assisted living care as well as nursing home care, causing some insurance agents to describe it as “avoid nursing home insurance.” (Read our post, Keep the Cost of Long-Term Care from Depleting Your Estate)

Growing Pains in Long-Term Care Insurance Industry

Unfortunately, the long-term care insurance industry is still relatively young and continues to experience growing pains. Until Congress began regulating the industry as part of the Health Insurance Portability and Accountability Act of 1996, many of the policies were poor, containing bars to coverage that could make them unavailable just when needed. Some companies that went into the business with great optimism have found that they were not making money and have retreated from the business or dropped out entirely. In recent years, insurers have been hit particularly hard by the climate of historically low interest rates because companies’ profits rely on returns from investing policyholder premiums. In addition, policyholders are living longer and fewer are abandoning policies midstream than actuaries had predicted.

Long Term Care Insurance Premiums Increasing. Claims Going Unpaid.

Between 2010 and 2012, three large insurers – MetLife, Unum and Prudential – ended long-term care insurance sales to some or all markets. Companies still writing policies are raising premiums, some precipitously. Others have put up roadblocks to claims on the policies. One long-term care insurance company in particular, Bankers Life and Casualty, has gained a reputation for not paying claims.

Still, having the insurance can be a lifesaver for a senior needing care, as well as for his or her spouse and children. The biggest problem with policies now is the cost the premiums being out of reach for most seniors and the refusal of insurance companies to guarantee their rates. (Read our post, Industry Group Reports 2021 Premiums for New Long-Term Care Insurance Policies) Another problem with long-term care insurance is that by the time many people purchase policies, they are uninsurable due to health problems. (Read our post, Don’t Wait Too Long to Purchase Long-Term Care Insurance) One solution to this problem, of course, is to purchase policies while you are young and healthy. The other solution is to shop around. Every company has its own underwriting criteria.

Read Reviews Before You Choose

The website Reviews.com rates which long-term care insurers are the most affordable, deliver the most robust coverage, are best for extended care, and offer the simplest policies. For the site's findings, click here.