Long Term Care Insurance: Don’t Choose Rashly..

The choice to purchase long-term care insurance is a very important choice and one that can’t be made in a hurry.

Every person’s circumstances are different, and your comfort zone is a major part of the decision-making process.

The choices are many and fairly unfamiliar. As you decide to shop for long term care insurance, you should investigate not only different insurance companies, policies and the various policy benefit options, but also learn about long-term care itself. Check to see what services are available, what type of facilities provide such care and the cost of that care.

Here are a few general guidelines to help you determine if you are in a financial position to purchase this type of coverage. Many financial experts have advised thusly: If you have assets of less than $60,000, excluding your home, you may not be able to afford LTC insurance. On the other hand, if you have upward of $1 million in assets, again excluding your home, you can probably self-insure (pay your own way) and wouldn’t necessarily need to make such a purchase, although insuring is always a smart move to transfer risk.

However, I think differently. I did not have $60,000 in assets when I turned 50, which was my own personal “deadline” for purchasing an LTCi policy. As a matter of fact, my wife and I were going through some hard times financially, which is one reason why I procrastinated. Unfortunately for us, I was diagnosed with Multiple Sclerosis just 3 months after my 50th birthday. I sure could use a good long term care insurance policy right now! I’d gladly pay for it with my last cent, but I am uninsurable due to the diagnosis.

In my mind, not owning LTCi because you don’t have $60,000 in assets is not very smart and you are taking a huge risk. There is so much at stake. Not just for you, but for your family. You may be willing to endure lesser care as a Medicaid recipient, but are you willing to put your spouse’s financial future on the cutting block? Are you willing to force her or him and/or your children into caring for you at home until they can no longer take the strain?

Think about it.

With that in mind, you will need to consider your income. Do not consider buying a policy that you can’t afford either now or in the future. A rule of thumb is that the premium should not cost more than 7 percent of your total income or 50 percent of your discretionary income (income left after all bills have been paid each month).

There are many factors, which is why you can use help from the Buyer’s Advocate. If you are a couple purchasing policies, you must consider what will happen to your income when one of you dies. With the likely loss of income, would you still be in a position to be able to pay the premiums for your policy?

When you buy a policy will have a lot to do with the cost of that policy. The younger you are when you make the initial purchase, the less the premiums will be. The cost of the policy will not increase because you grow older, however, premiums in general can increase over the years.

Whether you should buy long-term care insurance will not just depend on finances. Other considerations should include your age, health status and overall goals for retirement.

Not everyone should buy coverage. For some, a policy is affordable and worth the cost, but for others, the cost could be too great or the policy that could be afforded may not offer enough benefits to make it worthwhile.

Take your time, research, compare and do your homework before making your decision. Ask questions about the agent (See the Buyer’s Advocate Alliance), the insurance company and the policies themselves. Check with several companies to compare their benefits and costs. Don’t purchase a policy the first time you meet with an agent. Work with a broker who handles several companies. Don’t buy from an agent who sells door-to-door, and don’t believe any sales pitch that claims that you have only one chance to buy a policy.

Also, don’t be entranced by slick advertising. Most celebrity endorsers are professional actors paid to advertise, and they are clearly not insurance experts.

Spend time investigating, so that when you finally do make up your mind to buy, you are doing so as in informed consumer.

You may want to get your comparative rate quotes through the online Buyer’s Advocate system.

Technorati Tags: long-term care insurance, long term care, insurance, policy, benefit, financial, coverage, LTC, assets, risk, LTCi, policy, Multiple Sclerosis, Medicaid, premium, premiums, finances, retirement, coverage, benefits, policies, quotes