Consumer Guide: Long-Term Care Insurance

Long-Term Care Insurance

If you or a loved one are considering long-term care insurance, it’s important to find the right agent to guide you through the process. A long-term care agent can help you navigate the complexities of long-term care insurance, evaluate your options, and find a policy that meets your unique needs and budget. When looking for a long-term care agent, there are several factors to consider.

First, look for an agent who specializes in long-term care insurance. This type of insurance is a specialized area, and an agent who has experience in this area will be better equipped to help you navigate the process.

Second, check the agent’s qualifications and experience. Look for an agent who is licensed to sell insurance in your state and has a strong track record of success in helping clients find the right long-term care insurance policy.

Third, consider the agent’s approach and communication style. You want an agent who will take the time to understand your needs and concerns, explain your options clearly, and answer your questions in a timely and responsive manner.

Fourth, review the agent’s fee structure. Make sure you understand how the agent is compensated and what the total cost of the policy will be. Some agents work on a commission basis, while others charge a fee for their services. Agents should always work under the Fiduciary Standard no matter the fee structure 

Finally, don’t rush the process. Take the time to research your options, compare policies and prices, and choose an agent who you feel comfortable working with and who has your best interests in mind.

Tips From the Experts: Key Factors to Consider When Working with a Long Term Care Insurance Professional

Note: Any item listed with an asterisk (*) below is a NAOSA Gold Standard of Professional Practice™ and is required for NAOSA professional membership. For more details, please visit the NAOSA Consumer Guides page.

Be wary of replacing a policy

Policy replacement is rarely appropriate, even with an older policy facing a rate increase. Even at the higher premiums, the old policy is probably a good value and worth keeping. Why retain your current policy?

• Older policies may have better benefits, including lifetime payouts and 5% inflation coverage. These benefits are generally not available in today’s policies.

• Benefits in older policies may be reduced to lower premiums, while still maintaining meaningful coverage. This is important if the older policy contains benefits such as those described above that may not be available with a replacement policy.

Replacement is usually only warranted if you want a hybrid or linked-benefit product. These products typically offer guaranteed premiums and a death benefit if long-term care is never needed. However, don't be fooled in replacing your policy If these features aren’t important to you. If not, you probably should not replace the policy.

Understand what the policy covers

There are multiple types of policies that may be used to transfer the long-term care risk. Some combine life insurance and long-term care insurance, others combine annuities and long-term care insurance and there are stand-alone long-term care policies as well.

Long-term care insurance policies can vary widely in terms of what they cover and under what circumstances. Some combine life insurance and long-term care insurance, others combine annuities and long-term care insurance and there are stand-alone long-term care policies as well. There is no one best policy type. Make sure the policy fits your needs and make sure you understand the specifics of the policy you're considering, including what types of care are covered, any limitations or exclusions, and what triggers the policy to start paying out benefits.

Consider inflation protection

Long-term care insurance policies typically offer an option for inflation protection, which can help ensure that your benefits keep pace with rising costs over time.

Start planning early

Long-term care insurance premiums are based on your age and health, so the earlier you start planning, the better.

Request quotes from more than one insurance company

There are fewer insurance companies selling traditional Long Term Care Insurance today, so it is extremely important to know your options. Generally, you should understand the options available as well as the differences between insurance company offerings.
Long-term care insurance can also be expensive, so it's important to evaluate your budget and determine what you can afford. Work with an agent that represents multiple companies who can help you find a policy that fits within your budget while still providing the coverage you need.

Review the financial strength of the insurance company

Long-term care insurance policies are designed to provide coverage for many years, so it's important to choose a company that has a strong financial rating and a solid track record of paying claims. Look for companies that are rated highly by independent rating agencies like A.M. Best, Standard & Poor's, or Moody's.

Are you a long-term care insurance professional?
We welcome your constructive input to assist in the protection of all consumers. Please contact us.

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