Long term care insurance is insurance which will cover the costs associated with assisted living, nursing home care, or home health care. This insurance is useful in the occurrence that you are no longer able care for yourself due to disability, age, or a chronic condition. This type of insurance can be an especially wise purchase when you take into account that 70% of those 65 and over will require some form of long-term care, as according to the U.S. Department of Health and Human Services.
So why isn’t everyone purchasing long term care insurance? The reason is simple, not everyone can purchase long-term care insurance. For one ,if you’ve waited too long to purchase, the price of the product can dramatically increase. Meaning the price for an identical plan offering the same amount of coverage can more than double the longer you wait. Another factor to note is that, not all will be approved for coverage due to any underlying health conditions that may render some uninsurable. The chances of this occurring also tend to increase the longer one waits to purchase, as declining health and aging are usually conducive of each other. Others have shy’d away from putting a policy in place due to fear of skyrocketing premiums as seen in the past! Rightly so as when long term care insurance was first introduced in the 1990’s many policyholders later experienced dramatic increases in their premiums.
The factors which contributed to these volatile and rising premiums were a lack of screening upon underwriting for approval as well as a lack of data to accurately predict how many claims would actually be made over time. Due to these previously existing standards, individuals with poor health were being approved and many more claims were filed than predicted, initiating a rise in premiums to compensate for the gross miscalculations. Fortunately today, the underwriting process is much more detailed and their also exist countless years of data trends to help predict the number of claims which will actually be filed, leading to more stabilized premiums for all. So when it comes to long-term care your reasons for holding off may be resolved.
If you or a loved one is interested in Long Term Care Insurance be sure to checkout: LTC TREE for more information.