Friday, November 12, 2010

The New York Times Discusses Long-Term Care Insurance

The New York Times  recently reported that sales of long-term care ("LTC") insurance policies have stalled.  In fact 2009 was the first year the sale of LTC insurance policies did not increase since tracking of LTC insurance policies began in the late 90's.  The article cites a number of reasons why the sale of LTC insurance policies has lagged, including: 
  • The widespread misconception that Medicare covers long-term care needs (in fact, Medicare provides very little in the way of long-term care coverage)
  • The belief that they will likely not need long-term care (in fact, 45% of people 65 or older will file a claim on an LTC policy)
  • The presumption that they will qualify for Medicaid (which, while available with planning, does typically result in the loss of at least some assets, and Medicaid home care coverage is spotty)
Another impediment to the sales of LTC insurance is that the costs for the policies is beginning to skyrocket, as more people begin to go on claim than the insurance companies anticipated.  In fact, just today I heard that MetLife is going to stop writing LTC insurance policies in New York State (and maybe throughout the United States).

For those who can afford it, LTC insurance can be a great safety net.  For those who elect not to purchase LTC insurance, however, meeting with an elder law attorney to review proactive planning strategies -- often including the use of Irrevocable Asset Protection Trusts -- is a wise move.

Here's a link to the NYT article.

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