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Long Term Care Insurance

August 26, 2006

by Kit Cassingham

Long term care insurance becomes more important with time. Factors including increased longevity, rising health care costs, and a changing culture where the younger people don't care for the older people as much as they used to, contribute to a higher need for this kind of protection.

While much of the insurance we buy is betting on a rare event, long-term health insurance is betting on almost a sure thing. I've seen statistics that show the probability of needing long-term care insurance is fifty percent. Given those odds, you can be assured that this policy is going to be expensive, especially the older you get. As the rate goes up, it strains the budget increasingly until many times the consumer drops it because their fixed income budgets can't handle it any longer. Because insurance companies know how high the cancellation rate is for this kind of policy, and consumers don't tend to know it, the potential for fraud is high in this area of insurance.

So, what should you do? First, start with a knowledgeable and trusted agent, in an established office with a great reputation, who stays current on his insurance continuing education. Read policies carefully as you study them so you are sure to know and understand what they do and don't offer. Rely on what the policy states, not what the advertising fliers say, and ask lots of questions.

Why do you want long-term health coverage? To cover the daily costs of being cared for when you need help because of a long-term illness or disability. Your options for that kind of care include not only a nursing home, but also at-home care and adult day-care. Depending on your family situation and your anticipated long-term care needs, you want to make sure the policy you buy covers you for situations that appeal to you more, be it a nursing home or a at-home care.

Buying long-term care insurance takes careful research and expert guidance. Consider hiring an attorney to help you wade through policies, after the trusted agent has explained the nuances of the various policies found for you. Part of what makes buying this kind of insurance tricky is that agents can be seduced by the generous commission rates of selling a long-term health care insurance policy, and you don't want to get talked into something that's not going to be right for you. Pay attention to the strict restrictions and limitations on the benefits a policy has because it can reduce your options in collecting your benefits.

Since long-term care insurance isn't for everyone, you need to evaluate if it is for you. Don't let this kind of insurance cause financial hardship on you. There are several ways of tending to your care in your later years, this being one approach. There are no standard benefits, so comparing policies is challenging, complicating your homework process.

Finding this kind of coverage isn't as easy as opening your phone book either. You can tend to find long-term care insurance through private insurance companies with agents working for them. Some coverage is sold through the mail, while others are sold through fraternal societies, senior citizen organizations, continuing-care retirement communities, and even sometimes through employers.

Be careful when evaluating this form of insurance. Is it for you? Can you afford it? Is there a knowledgeable person available to you who can help you wade through the myriad choices and documents? Of all the insurance options we've discussed in this insurance series, this is the most confusing and questionably valuable. But, if you have assets you want to protect for your family, it's worth considering today.




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