Long Term Care Insurance Buyers Examined

The reasons people decide to buy long term care insurance protection was the focus of a special talk to financial professionals by one of the nation’s leading long term care insurance experts.

“Long term care planning is vitally important today because Americans are living longer and government and company retirement benefits are diminished,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance, the industry trade group.   “While we are educating millions of consumers about the risk, we also have to educate more insurance professionals so they understand how to effective approach their clients with the right information and the right messaging.”

Too few insurance agents understand what consumers know and don’t know about long term care insurance, including the reasons people decide to purchase coverage.  According to Slome, one of the nation’s leading long term care insurance experts, the fact that costs for coverage increases if they delay the decision was the number one factor influencing the decision to act.

“Once people understand that the long term care insurance cost they will only increase the longer they wait, they understand the importance of acting now,” Slome explains.  “Costs increase because they are tied to the age at which you apply so someone age 52 will pay more that someone age 50 for equal coverage,” Slome notes.  “In addition, as a result of the historically low interest rates virtually every long term care insurance company has been raising rates on their new policies.”  Once coverage is purchased, an insurer generally can only raise rates on an entire class of policies and often only following approval from the State Department of Insurance.

Over half of those who replied to a national study of long term care insurance buyers explained they purchased because ‘they thought the cost of insurance would increase in the future.’  “More insurance professionals need to understand this so they can explain why rates increase and help their clients make decisions at a point in time when they can still afford premiums,” Slome adds.

Other reasons consumers give for deciding to purchase coverage included they ‘thought it was a good idea to have it (long term care insurance) right now’ and ‘I could afford it now’.

The American Association for Long Term Care Insurance was established in 1998 to advocate for the importance of planning for long term care and to support insurance and financial professionals who market LTC insurance.  To learn more about long term care insurance costs call the organization’s offices at (818) 597-3227 or visit the Association’s website.

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