Long-term care insurance is important coverage for most people as they get older. Seniors may need to have this insurance coverage and should understand why it is important for them. But the cost of insurance sometimes can discourage customers from not purchasing it, and it may not be suitable for everyone.
This helpful insurance product protects people when they need additional care and services as they age. The services are usually designed to help keep seniors independent, which is something many people want during their retirement. However, there are drawbacks to long-term care insurance policies.
Learn more about long-term care insurance costs and considerations for your senior clients, then contact us at Key Retirement Solutions for more guidance.
Costs and Considerations of Long-Term Care Insurance
Long-term care insurance is a product meant to help cover long-term services, care, and support at home, in the community, or in a facility. These insurance policies typically provide policyholders a daily reimbursement for care with activities for daily living, like bathing, dressing, and cooking.
As people age, having a long-term care insurance policy becomes critical as many people will need these types of services to continue living independently. As their agent, you can help by discussing long-term care insurance and how it can help your policyholder. Sometimes you may want to talk with families as well as your client altogether, since long-term care needs affect the whole family.
Drawbacks of Long-Term Care Insurance
The main consideration when considering long-term care insurance is often the cost. The insurance is expensive, so for many people it is out of reach or undesirable. Costs for long-term care insurance policies vary based on several individual factors:
- The policy’s overall coverage limit
- The daily maximum limits the policy will pay
- The age of the policyholder when they purchase their long-term care policy
- The maximum amount of time the policy will pay out
- Any additional benefits or options added to the policy
Some policies only pay long-term care benefits for a period of time — sometimes up to five years. Other long-term care insurance policies will pay for services without a time limit. Hence, this will affect the cost of long-term care insurance.
Another drawback is the exclusions found on most long-term care insurance policies. Some common exclusions include mental illness, drug or alcohol addiction, care in government nursing facilities, and self-inflicted injuries.
Most long-term care insurance policies require medical underwriting. This means if your policyholder is not in good health, or if they are already receiving some type of long-term care service, they may not qualify for coverage. This is why purchasing a long-term care insurance policy while young and healthy is recommended. Reach out to your policyholders if you notice they do not already have long-term care insurance. As their agent, you can help them understand why it is important to purchase coverage before they really need it.
Some insurance companies will raise premiums on its long-term care insurance policies. Talk with your policyholders about the rate increase history of the carriers they are considering, so they can predict if their rates will go up.
How to Purchase Long-Term Care Insurance
As with most insurance policies, shopping around to compare rates and options is the best way to help your policyholders get the best rate possible. Help your customers understand their needs and if long-term care insurance is right for them. If so, gather rates from different insurance companies to help find the best price for long-term care insurance.
How Do I Learn More?
To learn more about long-term care insurance, contact us at Key Retirement Solutions. Our affiliated experts will be happy to answer any questions you have.
