ArkLaTex.biz | Ted A. Souter: Long-Term Care Specialist

Teddy A. Souter

Long Term Care

Veteran's Benefits

Fixed & Indexed Annuities

CHOOSING LONG TERM CARE INSURANCE

There are four major areas to look at when choosing a LTC Insurance Company:

1. Underwriting Philosophy of the Company
If a carrier is offering insurance to people that can't get coverage with other carriers, it is likely that they will have a lot of bad "risk" and pay out more in claims than other carriers. This could cause the insurance company to have to raise rates on the existing policyholders, or sell their long-term care block of business.

2. Pricing of LTC Insurance Products
Beware of carriers that price their LTC products "below market price". In other words, their price is far less than the average the other major carriers charge. If they do this then they will not have as much premium coming in to pay their claims and may need to raise rates on existing policy holders.

3. Experience in LTC Insurance Market
Experts recommend picking a company that has been in the long-term care insurance business for at least 10 years and has a claims paying track record.

4. Financial Strength of the Insurance Company
We recommend choosing a company that has the minimum financial rating from at least two of the independent rating agencies listed below.

A+	A.M. Best	908-439-2200
AA	Fitch	212-908-0800
AA	Moody's	212-553-0377
AA	Standard & Poors	212-438-2000

How Much Does LTC Insurance Cost?
The premiums you pay for LTC Insurance will depend on your age, the benefit features you select, the discounts you are eligible for, the insurance company you choose, and your health at time of purchase. As you can see, there are a lot of variables that determine the cost!

We can't tell you how much your premium would be without consulting with you to determine which options are appropriate for you. You have a lot of control as to how much the policy will cost. There are many different prices for each individual person.

Many people mistakenly think that since they won't use this policy for years that they would save money by waiting to purchase it until they are older. This is incorrect! The older you are when you purchase a policy the more you will pay in total premiums. This is due to several factors:

Your premiums will be based on your older age.
You will need to purchase a higher daily benefit as the cost of care will have increased.
You may have health conditions at that point that could increase the premium.
Worst of all, if you wait to apply when you are older you may be uninsurable!

Famous author and fnancial guru, Suze Orman, helps put the cost of LTC Insurance into perspective when you are evaluating purchasing a policy. "Regardless of your age at the time of purchase, the total cost for the LTC policy will be less than the cost of one year in a nursing home." Suze Orman, You've Earned It, Don't Lose It: Mistakes You Can't Afford to Make When You Retire - 1998.

You might be asking yourself, why should you pay for something that you may never use? According to Suze Orman, when you purchase LTC Insurance, you are doing the exact same thing you do when you purchase fire or auto insurance- you are protecting yourself against something that could happen eventually.

Long-Term Care Insurance Checklist
We have put together a checklist with suggestions that will help you when you have decided to purchase Long-Term Care Insurance. Contact us or email if you have any questions.

If you currently have a long-term care policy, and want to replace it with a different policy, do not cancel your existing policy until you have been approved for the new one.

Make sure you can afford your LTC Insurance premiums not only now, but for the rest of your life. Could you afford the premium if it were to increase in the future?

Make sure that you can afford to pay for your care during the elimination period you chose not only now, but 10 or 20 years from now when the cost of long-term care will have increased substantially.

If you are under the age of 70, make sure you purchased inflation protection.

If you are not sure of the benefits you want to apply for, we recommend applying for the highest benefit you think you may want. It is easier to reduce your benefits after the underwriter gives you an offer than to increase your benefits.

Make sure you check out the financial ratings and long-term care experience of the insurance company you are considering.

Review the outline of coverage that the agent is required by law to give you. This summarizes the important features of the policy. This is something you can use to compare it to other plans you are considering. We don't recommend comparing plans using only the glossy product brochure as there is not a lot of information on them. Better yet use the services of a dedicated Long Term Care Specialist

Ask the agent what the "free look" period is and when it begins.

Be sure to give the agent the correct and complete medical information on your application. If you don't, the company can refuse to pay your claim for benefits or even cancel your policy!

Ask the agent if you will be required to participate in a telephone interview or a face-to-face interview as part of the underwriting process.

Ask the agent to explain all the terms you don't understand and questions you have about the policy.