How To Shop For Long Term Care Insurance
February 26, 2018If, after running the numbers and statistics, you’ve determined that you do indeed need to purchase long term care insurance (LTC), the next step is obviously shopping. It’s a weird wacky world of insurance out there, so I’ll try to break it down a little bit.
Check existing policies
First, you may already own long term care coverage and not realize it. If you own life insurance, and particularly a policy you bought on your own that is not part of your group life insurance at work, your life insurance might include some LTC benefits. Some life insurance policies are sold with add-ons, known as “riders,” that offer various types of living benefits you can use if you don’t die.
LTC riders
A long-term care rider, for instance, may allow you to use a portion of the life insurance policy’s death benefit to pay for costs associated with a nursing home stay. It might be time to dig up those life insurance policies and give them a good review, or call your agent for an update. If you are also considering an update to your life insurance, adding a long term care rider might be less expensive than purchasing an individual LTC policy, and you would be taking care of two risks at once with a hybrid policy.
Check at work
Another good place to start looking for LTC coverage you might not know about is within your group benefits. Some employers make long term care insurance part of their employee benefits package, and this benefit may cover the worker as well as family members. Due to the relatively large number of people insured under a group plan, you may find the LTC insurance premiums as a group participant are significantly less expensive than if you went shopping for coverage on your own. Find out if your employee policy is also portable, so you can take it with you if you change employers or retire.
Check your memberships
Professional or service organizations to which you belong may be another opportunity to purchase LTC insurance coverage at competitive rates. As with employer provided benefits, being part of a large service or professional group may entitle you to better pricing.
Individual coverage
You can purchase an individual (or couple’s) policy from a licensed insurance agent, either locally or online. Be prepared to comparison shop and obtain policy quotes from several different providers. Better still, talk to an insurance broker who is not tied to only one company and let him or her get quotes from a variety of insurance companies and do the shopping on your behalf. Check with your state insurance commissioner to confirm the agent or company you are considering is both licensed to sell LTC insurance in your state and has a trouble-free track record.
As I mentioned earlier, the task of deciding how best to handle your future long term care needs is neither pleasant nor simple. It is, however, an important part of anyone’s financial plan. Hopefully you are now more confident in how to assess your needs, weigh your priorities, do some shrewdly competitive shopping, and find the type of strategy or coverage that is just right for you.
Want more helpful financial guidance, delivered directly to your inbox? Sign up to receive our posts, written by financial planners who work with people like you every day. No sales pitch EVER (being unbiased is the foundation of what we do), just the best our awesome planners have to offer. Click here to join.