Monday, August 27, 2012

When Should You Purchase a Long Term Care Insurance Product

The younger you purchase a policy, the lower the premiums will be. But if you are in your 40s, do you want to purchase insurance that you are unlikely to need for 40 years? Given the changes in the long-term care market place and in long-term care insurance itself over the past 10 to 15 years, it is hard to imagine what the world will look like in 40 years.

But if you wait until you are in your 70s, the premiums will be extremely high and you may be uninsurable due to health reasons. In 2005, a policy offering a $143 per day long-term care benefit for 5.5 years, with an inflation rider, cost a 55-year-old a national average of $1,877 a year, while the same policy had an annual premium of $2,003 for a 65-year-old and $2,604 for a 79-year-old.

So, the ideal time is probably in your 50s and 60s. One approach is to see how the premiums fit into your life and other obligations. If you have children who have not yet graduated from college, they will be your major concern. You should carry enough life insurance to see them through. But after your children, if any, are on their own, you might take the funds you were using to pay for life insurance premiums and use them to long-term care insurance premiums.

As with every insurance purchase, if you are considering long-term care insurance, you need to consult with a qualified professional to determine whether you can afford this type of coverage and whether the policy you are considering meets necessary standards. Long-term care insurance has attracted much media attention, and many insurance agents are now selling it. However, long-term care insurance is a complex product that should be approached with caution.

Insurance agents and brokers selling long-term care insurance should be highly trained and know how to recommend the right coverage based on a client's finances and objectives. One factor to consider is whether the agent has a professional designation in providing advice about long-term care. However, recommendations from friends and other advisors are also very important because they will have personal knowledge of the experience and integrity of the people they recommend.

One professional designation is that offered by the Corporation for Long-Term Care Certification, Certified in Long-Term Care (CLTC). The Corporation for Long-Term Care was established by a founding member of the National Academy of Elder Law Attorneys, the country's premier legal organization addressing elder law issues, and is dedicated to training agents to solve clients' long-term care needs. Moreover, the Corporation for Long-Term Care Certification's program is third party, meaning that it is not affiliated with any insurance company or supported financially by the long-term care insurance industry. This is important because you will want an agent who represents a number of insurance carriers so you can choose from a variety of policies.

If you need assistance with Medicaid Planning, Estate Planning or other elder law matters call the offices of Fabisch Law, L.L.C. to set up a consultation with Rhode Island Elder Law Attorney Matthew Fabisch at 401-324-9344.