What To Do Now That Some Companies Are Not Offering Long-Term Care Insurance

I previously blogged about how Prudential is the latest among several insurers to stop taking applications for long-term-care policies. Wall Street Journal has a few tips to help you deal with the downward trend in long-term-care insurance:

• Just use long-term-care insurance to supplement your costs: It might be a good idea to buy three to five years worth of benefits, or lower the daily benefit amount to what you might expect long-term-care to cost locally. You could also stretch out the period you choose to pay your expenses yourself before coverage starts.

• Tweak the policy’s inflations protection: More insurers are now offering inflation protection that does not increase as much, but still keeps premiums affordable.

• Be prepared for more scrutiny: Nurses or social workers will screen applicants’ health, and if you are taking any memory drugs, use any walking assistance, have had a stroke, or you have some osteoporosis, many companies will not sell you a policy. A way around this may be to buy coverage at a younger age. Most people used to buy in their 60s, but now the buyers can be as young as 40.

• Consider buying a hybrid product : A deferred fixed annuity might be a good substitute if packaged with long-term-care benefits. This could be good because even if you never need the coverage, heirs could still get a payout. An annuity also has tax advantages because payouts for long-term-care are not taxable. 

See Kelly Greene, Long-Term Care: What Now?, Wall Street Journal, Mar. 9, 2012. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.