My blog post of May 15, 2014 highlighted three ways to plan ahead for long term care costs, and my blog post of May 22, 2014 discussed whether to buy long term care insurance. If, after considering my comments in those earlier posts, you have decided to consider a long term care insurance policy; your next question is which insurance companies to consider.
Short answer: Buy long term care insurance from a stable, proven insurance company.
Long term care insurance is like whole life insurance (or other cash-value life insurance.) You buy it and start paying on it years before you expect it to provide a payout.
Long term care insurance is not like auto or home insurance or term life insurance. If your auto insurer goes out of business, you’ll have lost coverage at that time, but you can go to a new insurer. All that you will have lost is the premium that covers a few months between the insurer’s going under and the end of your policy term (always within a year.)
If your long term care insurer goes out of business, your premiums paid over a number of years are gone. In addition, the cost of a long term care policy from a new company will be higher because you will be much older and health issues may have arisen.
(Note: I know that it’s hard to determine which insurer will be safe and stable long term, especially after the financial institution upheaval in 2008. Just do your best. If the company smells weak, or if it’s selling on low price alone, look elsewhere.)
Summary: A low-priced policy isn’t really a cost savings if the insurer goes out of business before you can use the policy.
For more information, visit Jim’s website.
Jim Koewler’s mission is
“Protecting Seniors and People with Special Needs.”
For help with long term care or with planning for someone with special needs,
call Jim, or contact him through his website.
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