Why Traditional Long-Term Care Insurance May Not be the Best Option for You

Shawn Plummer

CEO, The Annuity Expert

If you are nearing retirement age, you may be considering purchasing long-term care insurance. This type of policy can be a great way to protect yourself and your loved ones in the event that you need long-term care services. However, traditional long-term care insurance policies may not be the best option for everyone. In this guide, we will discuss some of the pros and cons of traditional long-term care insurance policies. We will also suggest some alternatives to consider.

Traditional Long-Term Care Insurance Policy Cons

Some retirees choose to purchase a traditional, stand-alone long-term care (LTC) insurance policy, which pays benefits when qualified costs are incurred. A medical certificate of severe cognitive impairment or an inability to perform two of the six activities of daily living (eating, toileting, transferring, bathing) is one example of a situation that might result in benefit payment.

However, the policy must stipulate that it will be in force for a minimum of 90 days. In addition, fewer LTC insurance policies are available now than in years past, owing to the fact that many carriers have left the market. Some people believe the expense of LTC insurance premiums is too expensive and seek more flexible, affordable alternatives.

Another concern with a traditional policy is premiums can and most likely will increase in the future to a point where it is not affordable. Traditional LTC can be a “use it or lose it” type of insurance.

Long-Term Care Hybrid Insurance Pros

Hybrid products, such as long-term care life insurance and long-term care annuities, are among the alternatives to traditional, stand-alone LTC products. These solutions include built-in or available living benefit riders for long-term care specifically for a chronic illness or cognitive impairment that often necessitates long-term care.

Utilizing these hybrid long-term care products allow retirees to pay for long-term care at a fraction of the cost without an increase in premiums. Money not used can be returned or passed down to beneficiaries.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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