Carroll Harper & Associates, Inc.
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Long Term Care 2007 & 2008 Medicare and Long Term Care Tax Info
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Things to Consider Before Buying Long Term Care Insurance
Things to Consider
Before Buying
Long Term Care Insurance
THE COMPANY:
In the Long Term Care Insurance evaluation process one should consider the fact that benefits may not be needed for many years. Therefore, it is of utmost importance to do business with a carrier with strong financials, experience and a commitment to the Long Term Care marketplace.
Strong financials are important to pay for future claims. Experience is important to rate stability, and commitment is your assurance that the company is committed to the marketplace and your future.
Companies with positive ratings from A.M. Best, S&P, and Moody's with at least 10 years experience should be your guide.
THE AGENT:
The Long Term Care Insurance agent should be an experienced professional willing to work with you, your family and trusted advisors. The Long Term Care Insurance product is a financial planning tool that cannot be taken lightly.
Long Term Care Insurance professionals should be knowledgeable of Federal and State laws, as well as how Medicare and Medicaid apply to the LTC Insurance delivery system. Also, choose an independent agent who represents more than one carrier. The Long Term Care Insurance professional should be familiar with the LTC Insurance services available and how to access benefits at claim time.
THE PLAN:
Long Term Care Insurance is offered in many variations, making it difficult for many consumers to fully understand the inherent complexities. The LTCI benefit payments are paid in one of three ways, reimbursement, indemnity or cash. Coverage under the many policies vary as to the comprehensiveness of the coverage and what is required to receive the benefits of the policy. Additionally, coverage should be flexible to meet an ever changing marketplace.
Never buy on the first
call. A professional long term care insurance specialist will never
high-pressure you or intimidate you into purchasing on the initial visit.
Today's long term care insurance products are highly complex and require a great
deal of patience in the decision-making process.
Avoid buying from a
captive agent-in other words, an agent who only represents one carrier or who is
required to present that carrier first. Typically, these agents are under high
pressure to produce premiums and do not often put your best interests first. The
end result is they may profit at your expense. It is best to purchase from an
independent long term care insurance specialist who represents several quality
carriers.
Don't buy from a
financial advisor unless he or she can demonstrate to you that they work
directly with a long term care insurance specialist who provides ongoing
training and service for their brokers. Have them clearly demonstrate that they
have met the educational levels and work directly with a long term care
insurance specialist brokerage agency which will provide ongoing service at the
time of claim. Remember, investment advisors are specialists in investments and
not long term care insurance; for the most part, they have little knowledge
about how the contractual provisions of a long term care insurance policy work
and how to access benefits at claim time.
Avoid purchasing
through the mail or any mail order solicitation, as the complexity of this
product clearly requires one to work with a long term care insurance specialist
that the consumer can see and have contact with whenever necessary, to answer
their questions and assist them at claim time. There is nothing worse than
purchasing a policy and 20 years down the road need claim assistance and be at
the mercy of a toll-free number thousands of miles away with someone on the
other end who does not understand your individual needs.
Only consider long term
care insurance if you have adequate assets to protect. In other words,
a 65 year old individual with less than $75,000 in liquid assets, living on a small
Social Security income, will find that the insurance is probably
unaffordable. A good rule of thumb is, if you're retired and age
65 and older, as an individual one should have at least
$150,000 of liquid assets, including checking, savings, CDs,
stocks, bonds, etc., or $200,000 or greater for a couple.
There are always exceptions to rules, and one would be to
consider the children paying for the policy to protect their
inheritance, if financial suitability is not established.
Under age 65, income is given greater consideration than
liquid assets.
Whenever an agent contacts you, the following State
and Federal guidelines are required to be left with you on
the initial contact. This law has been in effect since Jan. 1, 2000
and is for your protection:
Less than 65 and not
on Medicare, the following documents must be left with you: 1) The Outline of
Coverage for the policy being presented at the time of the initial solicitation.
2) A National Association of Insurance Commissioner's Long Term Care Shopper's
Guide; or the Maine Long Term Care Consumer's Guide
65 and older: 1) The
Guide to People on Medicare; 2) The National Association of Insurance
Commissioner's Long Term Care Shopper's Guide; 3) The Outline of Coverage for
the long term care insurance policy being proposed at the time of the initial
solicitation. Failure of any producer to comply with this statute can be fined
up to $10,000 and should be reported to the Maine Bureau of
Insurance.
Carroll Harper & Associates,
Inc.
396 Main Street
P.O. Box 1420
Southwest Harbor, ME 04679
Phone: 207-244-5133
Toll Free: 800-539-5133
E-mail: nancy@harperltc.com
Copyright 2001-2008