Consumers considering long-term care
protection have significantly different options that come with different costs
and benefits according to the American Association for Long-Term Care
Insurance.
“Today, the vast majority of new policies sold
that offer some form of long-term care benefit are what we call linked-benefit
policies,” explains Jesse Slome, director of the long-term care insurance
industry group. “These are life insurance policies that provide a death benefit
and an option for the policyholder to receive defined levels of benefits if and
when they require qualifying long-term care.”
Click this link to See Comparison of Traditional & Linked Benefit LTC
Click this link to See Comparison of Traditional & Linked Benefit LTC
“I continue to advocate that any long-term
care coverage is better than having no coverage and being forced to rely on
loved ones or depleting your retirement savings, but there are some important
facts that few consumers know about,” shares Slome. The organization just
released data from their 2020 Long-Term Care Policy Price Comparison Study.
“We wanted to provide consumers with a greater
understanding of the two types of long-term care insurance options available
today,” Slome notes. “This is an important decision and once you’ve made
your choice you basically don’t and can’t change it. If you were buying a
car that was going to last for the rest of your life, imagine how much
information you’d study. Buying long-term care insurance is similar.”
According to the organization’s Cost
Comparison, a 55-year old single male would pay around $875-a-year for $180,000
of potential long-term care insurance benefit. If he wanted a
policy that increased the potential benefit payout by 3 percent annually, the
cost would be $1,710 per-year.
“By comparison, a policy that combines the
benefits of a life insurance death benefit as well as a potential long-term
care payout will cost more,” Slome explains. The Cost Comparison reported
that comparable long-term care benefits would cost $3,625 annually for a policy
with no inflation growth or $5,278 if the benefits were to grow at three
percent annually.
“Individuals are not aware of the importance
their health plays into determining not just what they will pay for long-term
care insurance but whether they will even be accepted for coverage,” adds Jesse
Slome. “Today, thanks to great medical care and the plethora of
medicines, we think of ourselves as being in good health when really we are in
good controlled health.”
Slome emphasized the importance of comparing
options for long-term care insurance coverage. “I explain to consumers
you have two excellent options, just as today you could by an all gas-powered
car or one that’s a hybrid or all electric,” he advises. “You want to
compare to make certain that you get the right coverage for your future needs
and your immediate financial situation.”
To learn more about long-term care planning
visit the Association’s Consumer Learning Center page where the 2020 Price
Index can be accessed. To connect with a specialist who can explain
both traditional and hybrid products contact the Association. Call
818-597-3227.
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