Purchasing a long-term care insurance policy can be extremely confusing, time-consuming and a complete waste of aspirin.
Anyone who has ever looked into it knows that the costs of staying in a nursing home are extreme. With people generally living longer more and more people are having to confront how they will pay those costs.
Because of this concern an industry arose to seemingly help pay for the costs. Insurers began to offer policies that would cover the costs. As simple as it might sound to pay for nursing home costs with a long-term care policy it is anything but a simple process.
Recently, The New York Times discussed the complexities in an article entitled “Long-Term Care Insurance Can Baffle, With Complex Policies and Costs.”
The key thing to understand is that 90% of the companies that offered long-term care policies in the past no longer do so. These companies discovered it is very difficult for insurers to make money on the policies.
Those companies still in the market offer a confusing array of policies with benefits and costs that are not always easily understood. It can be migraine-inducing for people to figure out what they are getting if they purchase a policy.
It can also be a complete waste of time for a couple of reasons.
First, 40% of people who apply for the policies are turned down for health reasons. Second, the policies do not offer life coverage. They are short term policies and if your need for coverage exceeds the policy term then the money spent on premiums is wasted.
As the New York Times suggests, if you are considering long-term care insurance, it is important that you seek independent advice, such as from an elder law or estate planning attorney. That way you can be sure the policy is actually needed and can be certain of the benefits you will receive under the policy.
Reference: The New York Times (Dec. 18, 2015) “Long-Term Care Insurance Can Baffle, With Complex Policies and Costs.”