Monday, August 5, 2013

Long-Term Care Insurance is not for everyone--CNBC Nightly Business Report Three-Part Series

With Americans living longer and baby boomers hitting retirement age, the demand for long-term care is expected to surge. Long-term care (LTC) insurance is one way to pay for long-term care. But according to a recent three-part series aired on CNBC’s Nightly Business Report, LTC insurance is not ideal for everyone.

Watch the CNBC videos:

View Part 1        View Part 2        View Part 3

Is LTC right for you? According to the Nightly Business Report “If you have less than $200,000 - $250,000 in total assets, the chances are very good that the premiums you would lay out for long-term care insurance would be cost prohibitive relative to the risk that you’re actually shielding your assets from, because you don’t have enough assets. On the other end of the spectrum, people with over $2 million in assets may want to consider self-insurance as part of their long-term care plan. Those in the middle should consider some form of long-term care plan, but it may or may not include insurance.”

If you are considering LTC insurance, first look at each policy very closely because each one is written differently. Also, look closely at the insurer’s claims payment history and whether they have been increasing premiums for existing policy holders.

Keep in mind how LTC insurance has failed some consumers:
  • About half of all LTC policies lapsed before any benefits were paid; policy holders were unable or unwilling to continue paying their premiums.
  • Of those people who bought insurance and later entered a nursing facility, about half never collected a dollar from their LTC policies.
  • No benefits were ever paid to the many people who bought nursing facility coverage but instead received home care or entered a residential facility not covered by the insurance.
  • When LTC benefits were paid, they were usually far below the actual cost of care.For many of the longest-term residents, benefits were used up before the nursing facility stay ended.

In all of these situations, LTC insurance failed to live up to its promise to help people avoid using up their savings or relying on Medicaid to pay for long-term care.

There is a 71 percent chance for people over the age of 65, that at some point in their lives, they will need long-term care services. That alone says that you have to have a contingency plan in place. With long-term care costs rising faster than inflation, insurers have been raising premiums sharply. As mentioned previously, if you have done your research and decide LTC insurance is right for you and your family, you should incorporate it as part of your long-term care plan, not as the only form of planning for long-term care.  There are dozens of long-term care asset protection strategies other than long-term care insurance. For example, the Living Trust Plus™ Medicaid Asset Protection Trust is just one of many long-term care asset protection strategies.

If you have not done Long-Term Care Planning, Estate Planning or Incapacity Planning (or had your Planning documents reviewed in the past several years), or if you have a loved one who is nearing the need for long-term care or already receiving long-term care, call The Fairfax Medicaid Asset Protection Law Firm of Evan H. Farr, P.C. at 703-691-1888 to make an appointment for a no-cost consultation.


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  2. You're right, long term care insurance is not for everyone but it doesn't mean that people should refrain from looking into this product or totally shrug off the idea of purchasing one. In my opinion, it's best to have your needs assessed first to make sure that you'll greatly benefit from this type of insurance in the future. Also, one can also do thorough research first before purchasing like looking for information on ltc insurance that can help them make up their mind and as well as an insurance company that will not mislead them. It's all about making the right choice when investing in long term care insurance. This might not be a perfect fit for you but it will perfectly suit somebody else at one point of his life.

  3. Well yes it really depends on the people. And they often put off making these long term care choices because it is expensive and they feel fine now. But, there is no guarantee when it comes to your health. To deal with the financial threats, some professionals do suggest purchasing long term care insurance. However, this choice is not for everyone. Income level and amount of resources are important concerns. So be sure to take information on long term care insurance quotes before you decide to get one.

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  5. Wow, people used to just live their lives, make the most of it and accept that eventually they would die. There was no way to insure against that. Now, we have to buy very expensive long-term care insurance to help cover the cost of a chronic illness, that would normally shorten our lives, so that we can stave off death for a few years more.

    Home health care is far cheaper than hospital or nursing home care. Would it not be better to redirect Medicare funds to cover these cost instead of paying for very expensive and futile treatments for the very elderly? Would it not be better to concentrate on quality of life instead of increased longevity? At some point we have to accept we are going to die and refuse further expensive health care.

    - Tom from

  6. Great post. Have you ever considered senior care for elders? I would definitely recommend checking out the different home care services you have available in your local area.

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  8. Long term care insurance is one of the best payment options nowadays but it's not for everyone. There are people who will greatly benefit from this while there are some who are better off with self-insuring, government programs or hybrid products.

    It is expensive in nature, so it's best to assess your needs first and consider your financial capacity before purchasing. Consulting a care planner can help you decide what type of policy to purchase and personalize this according to your future needs. Requesting for long term care insurance quotes from reliable websites like and is also advisable before making a purchase. This allows you to compare policies, costs, discounts and policy features from different carriers, and thus guide you in choosing the most fitting long-term care insurance for your needs.

    More people will rely on long term care sooner or later, so it's best to prepare for this by increasing your retirement income or by purchasing a policy.

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