Important considerations when choosing long-term care insurance

We’ve talked here many times about the importance of having long-term care insurance. We know that one of the primary reasons that people don’t get it is the cost. However, how much you pay for a long-term care policy can depend on how much thought and planning you put into your choices

The head of the American Association for Long-Term Care Insurance who has written consumer guides to long-term care planning and retirement provides some important things that consumers should consider as well as some questions to ask the insurance or financial professional with whom they are dealing.

Find out if you can get a plan that allows you to increase your coverage over the years. This can allow you to get a good rate when you are younger and presumably healthier than you’ll be in future decades. This will require that you “examine your long term care plan periodically just the way you track your investments,” and consider increasing your coverage in future years.

Another important consideration is how much of the cost of long-term care you’re willing or able to take on when you need it. The lower the amount of benefits you will receive, the lower the premiums will be. This involves planning for what you believe you will be able to afford from your savings, Social Security and other assets or income.

If you are dealing directly with an insurance agent, find out how long he or she has been selling long-term care insurance and with how many companies that person is appointed. “Appointed” refers to how many companies pay them a commission for selling one of their policies. You want an agent who will recommend the best policy for you, and not just sell you a policy from one company, whether it’s right for you or not.

The long-term care expert also recommends reading the fine print of the policy. This is good advice for just about everything, although it’s easier said than done.

If you have a legal or financial advisor, you may want to ask that person to review the policy to help ensure that there aren’t any loopholes that could impact whether a claim is accepted once you file it. An insurance policy is only worthwhile if it covers you when you need it.

Source: Market Wired, “Long Term Care Insurance Savings Depend on Asking the Right Questions” Nov. 21, 2014