Another reason not to wait

I've always told potential clients that if you wait to long to buy long term care insurance, you may loose your health and the product may no longer be available. I just had an experience with a client that enlightened me to another reason not to wait.

My client purchased a nice size policy about four years ago. She had hepatitis C, not treated. The company I placed her with accepted the application and she's been covered since then. Just recently, she called me to inquire about having her coverage increased. When you increase your coverage on an existing policy, you must still go through medical underwriting.

Unfortunately, since she purchased the insurance, the underwriting standards have become more strick and the company no longer found the client "insurable." Had this client waited until this year to purchase coverage, she would not be able to get insurance.

Therefore, it is not only your health that may change and make you insurable, underwriting standards may become more strict also making you insurable. With the millions of baby boomers entering their senior years, companies know their risks are going up and I wouldn't be surprised if underwriting standards become even more strict over the years.

Motion Picture Home Closes

Upon reading the Opinion section of today's Los Angeles Times, I realized how sad it was that people had to place they knew as home because they had depended on promises and someone elses money to make sure that they were taken care of when they could not longer care for themselves. They paid dues to the union, which only really allowed them to live in the facility. It was never a promise to fund the care. Residents were required to spend their own money until they had little left and then Foundation resources and Medical would pay the bill. Unfortunately, foundation funding ran dry and California is $203 million behind on Medical payments. There are many nursing home that are not getting paid along with the Motion Picture Home.

This is a sad reminder that the only way to make sure that you have control of how and where you are taken care of is to have your own resources These resources may mean money markets, real estate, stocks, annuities, bonds or pensions. Even the income from some of these resources may not be enough as we have seen from the fall is stock prices and value of real estate.

The one sure way to know exactly how much money you will have to fund a long term care need is a long term care insurance policy. When designing a plan, be careful to understand how much of the financial risk you are maintaining and how much will be transferred to an insurance company. Make sure you can afford to fund the difference if you don't purchase enough insurance.

When you loose your independence due to a physical or cognitive impairment, make sure you make plans to maintain your financial Independence so that you have choices over where you will receive your care and control or those decisions.

How are going to protect what you haven't lost in the market?

Many people who were depending on retirement portfolios and wealth in real estate to pay for the high cost of long-term care are finding that neither option may still be a viable solution. Therefore, this is an opportune time to consider buying an insurance policy to make certain that the resources needed to pay for the cost of care will be there regardless of market or real estate values.
Many Americans who are working and saving for retirement should consider how a potential need for long-term care could quickly derail the plans they've made for retirement. Those residents who want to remain in their own homes or have some control of the type of care they receive often find that long-term care insurance is the best way to plan for future care needs. They are frequently surprised to find that working with an experienced agent who specializes in long-term care planning can help find plans that can be affordable for many people.
Time is the enemy when it comes to long-term care planning. Consider these facts:
- Generally, every year that someone delays the purchase, the premium increases. The rule of thumb is that every five years a person waits to purchase a policy, the premium doubles due to increased age.
- A change in health may limit your options, increase the cost or make it impossible to qualify for long-term care insurance.
While we can choose anytime to start saving for retirement, draft a will or fund a trust, the same cannot be said for the purchase of long-term care insurance.