Long-Term Care Insurance Not For Everyone: Financial Advisor

With Americans living longer and baby boomers hitting retirement age, the demand for long-term care insurance is expected to surge. But according to financial advisor Tim Maurer, long-term care insurance isn’t for everyone.

“If you have less than … $200,000, $250,000 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,” Maurer told “Nightly Business Report.”

With no insurance, you will likely to go quickly through those assets before Medicaid steps in to help, he added.

On the other end of the spectrum, people with over $2 million in assets may want to consider self-insurance, said Maurer, who is with Financial Consulate.

It’s those in the middle who should consider some form of long-term care plan, which may include insurance. The best time to purchase coverage is when you are in your 50s. After age 60, premiums begin to increase.

(Read More: Planning for Long-Term Care Can Have a Big Payout)

So what should you look for when shopping for the best policy?

First, look at each policy very closely, Maurer cautioned, because each one is written differently.

“I suggest you only get a policy that will allow 100 percent of your benefit to be home health care, and then take a specific look at how many activities of daily living are required for you to get your long-term benefits,” he said.

Maurer also suggests looking closely at the insurer’s claims payment history and whether they have been increasing premiums for existing policy holders.

(Read More: This ‘Last Resort’ Could Help Pay for Long-Term Care: Financial Planner)

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  1. betty june says:

    Maurer also suggests looking closely at the insurer’s claims payment history and whether they have been increasing premiums for existing policy holders. Where can I find this data?

  2. John Gills says:

    Years ago, when being pursued by agents selling Long-Term Care Insurance, I asked if any of the companies they represented had a ‘B’ or better rating from Weiss Ratings. No one ever called back….

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