How to Buy Long Term Care Insurance

In addition to the medical costs, there often are costs for basic care that our medical insurance won’t cover. It is quite possible today to live for years even after we might become partially, or even fully, disabled. If so, we may need help getting around; eating, bathing, etc. It is unlikely that we will have family members who either can, or will, completely take care of us. Even if that were possible, it’s quite a burden on them and we probably would rather not impose that on our loved ones.

In our later years, we most need our loved ones to provide emotional support and enjoyment of our time together. That is very difficult if they are also forced to provide for our physical care on a day-to-day basis. To put it bluntly, if that happens, they likely will be resentful of the burden and restrictions imposed on their own life.

Your case may be different. You may have true angels for family members. If so, maybe you need not worry about long term care insurance.

But, for most of us – we need to think about how we can ensure we have adequate long term care should it be needed. Again, I’m not talking about long term care medical insurance; this article is about the care needed in addition to what medical insurance will cover.

There are essentially three ways we can get long-term care.

1. Pay cash for it.
2. Buy long-term care insurance.
3. Rely on Medicaid.

Cash: Most of us do not have sufficient money to pay the costs of long-term care which could be very high. The costs depend on how intensive the care is that’s required; whether it can realistically be provided in our home or will we have to move to a nursing home or assisted living facility; and, how long the care will be provided. The cost of the premiums for long term insurance will depend on factors such as our age; medical condition; family medical history; features of policy, etc. Truthfully, unless you have more than a million dollars you can devote to this if need be, paying cash is probably not a viable option. And, even if you have that kind of money, as a matter of estate planning, you might be better off buying the insurance and preserving more of your estate for use elsewhere.

Medicaid: is the option that many end up "electing" because they are forced to. But, there are many problems with that. First¸ you may be forced to "spend down" your assets before you qualify for Medicaid. And, second, Medicaid will not pay for some of the costs that you likely will want covered. If you don’t have many assets, then the "spend down" requirements may not matter much. Maybe you will easily qualify without losing much. You will still have the problem of Medicaid not covering many things. But, all in all, if you don’t have many assets, relying on Medicaid may not be a bad option. As a practical matter, if you don’t have many assets, you probably can’t afford to buy long term care insurance anyway.

Long Term Care Insurance: Most of us are somewhere in the middle and for us, the best option is probably to buy a good long-term care insurance policy. So the most common reason to buy long term care insurance is because we have enough assets to protect that Medicaid is not an option; yet not enough money to be sure we can pay cash for any elder care we might need.

• The single best piece of advice I can give is -- SHOP AROUND!! You must get quotes from at least three reputable long term care insurers. You will find that each company offers different options at different costs. You will learn a lot as you go through this research process. Not only will doing this help you get the best value for what you want – but, maybe even more importantly, you will discover and think of different long term care insurance features and coverages you want or need and maybe find some you don’t need. In the end, you will have a better policy for yourself. There is no substitute for doing this.
• BARGAIN: You don’t have to use any high-pressure tactics to do this. If you shop around, you will find that prices can vary widely between insurance providers—particularly as you drill down into the cost per feature. Simply talk to them about this. For instance, call Company A and say something along the lines of:

  I think your company is great. But, put yourself in my shoes. Company B is offering to provide the same coverage at a lower cost. What can I do? I’d like to go with you all but ….

  Once you get a new quote from Company A; call Company B back and have the same conversation. Go back and forth (within reason) until you have squeezed all the fat out of the price of the policy. You will probably find the long term care insurance companies to be very competitive with each other and eager to win your business (and keep it from the competition).

• However, go for the policy with the best value; not necessarily the lowest price. The lowest priced option may be that way for a reason. Be particularly suspicious of policies priced well below the average market price. After all, no matter how cheap a policy is, if it doesn't pay off when you need it – it was too expensive.
• Shop Reputable Insurance Companies. You can find out who they are through long term care insurance resources like your state insurance agency; AARP; and Consumer Reports.
• Use a Long Term Care Insurance Specialist. It’s always a good idea to at least consult with an insurance agent or broker or long term care insurance lawyer or consultant. The initial consultation should be free and you may decide to let the pro do the work for you. Just make sure he or she does the things we’ve outlined here.
• Check Employer or Group Long Term Care Insurance (LTCI) Plans. Oftentimes your employer will be able to offer you a LTCI plan at a lower cost than you could get on your own. Similarly, consider what groups are a member of that may offer similar group LTCI plans.
• Make Sure You Can Afford the Policy. This seems simple enough. The problem is that what we can afford today, we may not be able to afford in the future. So, think about how much you can afford to pay in the future. There is nothing worse than obtaining a long term care insurance policy that you later cannot afford; stop making premium payments; and then are not covered when you actually need it. Along, these lines, make sure the policy has acceptable limits on how much the premiums can increase over time.
• Make sure you have -- in writing -- everything that you are expecting be covered by the plan or insurance into writing. It is very, very common that a long term care insurance buyer is told something by the insurance agent, but it is not in writing in the final policy. Be alert when the agent makes general statements like: "don’t worry, the insurance is comprehensive" or "extensive" or "complete." You need to follow up and ask for clarification of what he means by those terms. And, of course, ultimately, all of that needs to be in the written policy.

Of course all of this is well and good in the abstract. But, there are also long term care insurance problems to consider. Buying long term care insurance means we have to sacrifice in other areas. So, it's not free; and not an easy choice. In making it, you will have to consider many variables individual to you. One is simply how likely you feel you are to one day need long term care insurance. That should not be the overriding consideration since we are often wrong about that. Still, obviously, it's something to think about. And, then there is what other support you might have available. What your family's medical history is like, etc, etc, etc.

Hopefully, you now have a few tips and pointers to as you research whether to purchase elder care insurance, and if "yes;" then how to buy long term care insurance. At a minimum, you owe it to yourself and your family and friends to at least do some research and weigh the pros and cons of long term care insurance in your particular case.

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