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Tips For A Successful Long-Term Care Insurance Purchase

Written By: Nathan Justice
Reviewed By: William Rivers
Published: June 22, 2023
Last updated: August 12, 2023

When it comes to purchasing long-term care insurance, making informed decisions is crucial for your financial security. By following the tips below, you'll be well-equipped to make a successful long-term care insurance purchase that protects your financial well-being and provides peace of mind for the future.

Start Shopping At The Right Age

Purchasing long-term care insurance is a crucial step in ensuring financial security and peace of mind for your future. Choosing when to buy is a key factor in determining the cost and likelihood of being approved for coverage. Generally, it is recommended that people start shopping for long-term care insurance in their mid-50s.

Purchasing insurance earlier in life has several benefits. Firstly, it typically results in lower premium costs. Insurance premiums increase with age, meaning that at each younger age, your premiums will be lower than if you were to wait and buy it later in life. Secondly, younger individuals generally have fewer pre-existing health conditions, which increases the likelihood of being approved for coverage. Lastly, once you lock into coverage at a younger age, your policy cannot be canceled as long as you pay your premiums.

Work With A Trusted Insurance Advisor

Working with a knowledgeable and reputable insurance advisor can make a significant difference in finding the right long-term care insurance policy for your needs. Trusted insurance advisors provide valuable guidance and recommendations based on your unique situation, goals, and budget. They can also help you understand different policy options, benefits, and available discounts.

To make sure you are working with a reliable insurance advisor, consider the following:

  1. Research your potential insurance advisor. Check online reviews and seek recommendations from friends, family, or coworkers who have experience purchasing long-term care insurance.

  2. Confirm that your insurance advisor is licensed to sell long-term care insurance in your state by contacting your state insurance department or verifying their credentials online.

  3. Make sure the insurance advisor is well-versed in long-term care insurance policies and represents multiple insurance companies, providing you with a wide range of choices.

Ensure Adequate Coverage Without Overbuying

It's crucial to strike a balance between having sufficient coverage and avoiding unnecessary expenses when purchasing long-term care insurance. Begin by assessing your likely future care needs, considering factors such as family history, current health status, and any potential lifestyle changes.

When evaluating the amount of coverage you require, consider the following: 

1. Daily or monthly benefit: This is the amount the policy will pay per day or month for long-term care services. Keep in mind the current costs of care in your area and how inflation may affect these expenses in the future. 

2. Benefit period: Choose a term that reasonably reflects your anticipated care needs, such as 3, 5, or 10 years. 

3. Elimination period: This is a waiting period before benefits begin, similar to a deductible. Selecting a longer elimination period can help lower premium costs. 

4. Inflation protection: Consider purchasing a policy with inflation protection to ensure the benefits keep pace with the rising costs of care.

Regularly Review And Update Your Policy

It's essential to regularly review and update your long-term care insurance policy to ensure continued alignment with your evolving needs and changing financial situation. Experts recommend reevaluating your coverage every two to three years, or when significant life changes occur.

When reviewing your policy, consider:

  1. Your current health status and any changes in medical history.

  2. Updates to your financial situation, including income, assets, and retirement plans.

  3. Changes in your family structure or support network, such as marriage, divorce, or having adult children capable of providing care.

  4. Revisit the costs of care in your area to ensure your coverage remains adequate in meeting future expenses.

By following these tips, you'll be better prepared to make a successful long-term care insurance purchase that provides security, peace of mind, and financial protection for your future care needs.

Frequently Asked Questions

What factors should be considered while choosing a Long-Term Care Insurance policy?

When choosing a Long-Term Care Insurance policy, consider factors such as your age, health, financial situation, coverage amount, elimination period, benefit period, inflation protection, and available riders to tailor the policy to your needs.

How does the elimination period affect my Long-Term Care Insurance policy choice?

The elimination period is the waiting time before benefits begin. A longer elimination period reduces the premium but delays access to benefits. Choose an elimination period that balances affordability and timely access to care.

What is the importance of inflation protection in Long-Term Care Insurance policies?

Inflation protection adjusts your benefit amount to keep pace with rising care costs, ensuring your policy remains adequate over time. Choose an inflation-protection option, such as automatic increases or a guaranteed-purchase option, to maintain the policy's value.

How can I determine the right amount of coverage for my Long-Term Care Insurance policy?

To determine the right coverage amount, research local long-term care costs, consider your financial resources and potential future needs, and factor in any support from family or government programs. Select a policy that covers anticipated costs and aligns with your budget.

How can I compare different Long-Term Care Insurance providers and policies?

Research and compare providers by evaluating their financial strength, customer reviews, and available policies. Request quotes and policy illustrations for comparison, and consult a trusted insurance agent, financial advisor, or elder-care specialist for guidance.

What is the impact of my age and health on my Long-Term Care Insurance policy choice?

Age and health influence the cost and availability of a Long-Term Care Insurance policy. Applying at a younger age often results in lower premiums, while pre-existing health conditions may lead to higher premiums or denial of coverage. Apply early and maintain good health to secure favorable terms.

To get the most value out of your policy and make the best decision for your financial future, check out the following 5 ways to use your life insurance policy when nearing retirement.

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Nathan Justice manages community outreach programs and forums that help many senior citizens. He completed a counseling program at the University of Maryland’s Department of Psychology.
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