Monday, February 07, 2005

LTCi (what the heck is that?!)

An alternative to cruising?
Long Term Care insurance (LTCi) is one of those coverages, like disability, that everyone says folks need, that all the financial guru’s says folks need, that all us insurance folk say folks need [ed: getting a little “folksy,” aren’t we?].
But so few people actually DO buy it (or buy into it).
Now we learn that one reason that so few folks own LTCi is because they can’t get it:
“More than half (57.2%) of individuals who apply for long-term care insurance after their 80th birthday are declined coverage according to Long-Term Care Insurance Sales Strategies magazine. At older ages, the percentage of applications declined was significantly higher...only one in 10 (10.7%) applicants who were between ages 50 and 59 were declined coverage.”
Now, granted, anyone who waits until their 80 to start even looking for such coverage is most likely going to be disappointed. But my take on this is that maybe I haven’t really been pushing it that hard with my clients. First, this type of insurance is a bit more complicated than, oh say, term life insurance [you need more!], but it doesn’t have to be rocket science (or as my techie wife would say, “it’s not computer science!”).
Really, when you get right down to it, LTCi is nothing more than disability insurance for retired people. That is, it’s a way to protect your assets from being eaten up by a need for care, whether in a nursing facility or the comfort of your own home. Now, statistics seem to show that only about 1/3 of folks over age 65 actually end up needing such care.
But think about this: there's only about a 1 in 1200 chance that we'll have a house fire, but we all have homeowner’s insurance, right? Granted, the bank makes us buy that, but you get the point: it’s much more likely that we’ll need long term care than that our house will burn down.
It’s all about managing risk.
BTW, a group of governmental agencies have launched the Long-Term care Consumer Awareness Project, with the goal of increasing consumers' awareness of the need to plan for potential long-term care needs. For more information, and even printed materials, check out
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