Long Term Care Insurance?

Hi, my husband and I are looking into LTC insurance. I am 59 and he is 62. What type is better? So far, we have had quotes on one that requires a large amount up front, earns interest, can be cashed in after 11 years by us, but once used we cannot cash it in…but what is remaining becomes a life insurance policy for beneficiaries. The others are term that have so many options it becomes confusing. Are there other types that are better? I know it all depends on what we can afford…but what is a good guideline on how much we should try to purchase? What should the amount be, for how long, and is it better to buy less and pay extra for inflation coverage? We just want to have something in place before we retire but want to be able to afford it after we do retire.

Thanks for any help/advice you can give us!

SAVAGE SAYS: Great question.  For many years LTC insurance was sold on the assumption that once purchased, cheaper at a younger age, the premiums would stay level.  But the insurance companies mis-judged the usage of the policies and the longevity of the policy-holders and started losing big money paying claims for a long time! So in recent years, they have raised premiums on all holders of existing policies (giving them the choice of cutting coverage amounts, or time periods, if they could not afford higher premiums).  It has given LTC insurance a very bad name.

But the concept of LTC insurance is still good, and the better news is that premiums have already been increased and are less likely to rise sharply in the future — tho no guarantees.

What type of policy is a very personal situational decision.  I recommend you talk to Brian Gordon at MAGA LTC  — 800-533-6242.  They are among the largest long-term care insurance specialists in the country, and I trust them completely.  (Feel free to use my name, or not, because I get absolutely nothing out of this recommendation.)  They can look at your financial picture and tell you whether a “combo” policy that combines life and LTC insurance is more appropriate than a traditional LTC policy -and they can recommend and sell both, so no bias.  You will be in good hands.