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ABC and the Need for LTCi

Vice President of Communications, LIFE Foundation

ABC News continued a series about medical care for the elderly on its June 26 evening news broadcast. The report focused on long-term care and left viewers with important things to think about when planning for their retirement. It emphasized the high cost of long-term care and the growing need for long-term care insurance, or LTCi. A health insurance expert interviewed for the segment said rightly, “I think long-term care insurance is extremely useful, becoming much more important than it was 10 or 15 years ago because people are living longer . . .”

As we live longer, the need for long-term care rises. There’s about a 50-percent chance you’ll need some type of long-term care after age 65. Your standard health insurance won’t cover long-term care expenses. And chances are good the assistance you need won’t be picked up by the government program, Medicaid, either. Medicaid is designed for low-income Americans and only kicks in after your assets are significantly depleted.

Just how significant can those long-term care costs be? Substantial. To its credit, ABC dramatized the point well. Consider these figures: To have a home health aide visit just three days a week can cost more than $20,000 annually. Full-time nursing home care, the most expensive type of care, can average more than $60,000 per year. In some regions of the country, like the Northeast, the cost may be twice that amount.

LTCi then is the most reliable way to cover the potential costs of long-term care while protecting your savings. While the cost for the insurance can be (but doesn’t have to be) expensive, it’s likely you can’t afford to do without it.

That brings me to my gripe with ABC News. It suggested the companies that issue the policies can’t be trusted to make good on payment. The denial of LTCi claims is not the problem ABC News, the New York Times or even Congress have made it out to be. These reports irk me as it does MANY insurance professionals and happy policyholders. In reality, the number of complaints is small compared to the thousands of satisfied customers whose families are eternally grateful that their loved ones had the foresight to plan ahead.

Let me tell you about one of those satisfied customers. Debra Newman, a long-term care advisor and a member of the LIFE Foundation board, said she advised a client to purchase a LTCi policy 10 years ago at the same time the client’s financial advisor was advising him not to—the advisor told him he had a lot of money and didn’t need it. The client got the LTCi policy and today he is glad he did. His wife has been on claim for five years, and the company has already paid out $200,000 in long-term care expenses—with no end to its financial support in sight. (By the way, the financial advisor who recommended he not get the LTCi policy is no longer in the business!) Deb points out that nearly all companies are close to paying 99 percent of their claims. Two companies with a lower rate—and used in a recent New York Times article to demonstrate a supposed “problem” in payment claims—still boast over a 90-percent rate.

So if you are considering purchasing a LTCi policy, do as the expert on the ABC News segment recommends: read the fine print. Know exactly what the policy covers. To best understand the features in a policy and your options, talk to an insurance professional who specializes in long-term care. The agent can help you compare policy features such as the services covered; how much the policy pays per day; if it has a maximum lifetime benefit; the point at which pre-existing conditions are covered; and when the benefits begin.

Getting the expert advice is my advice. Talk to a Deb Newman in your community. With the chances of your needing the insurance likely, the LTCi policy might be one of the most important buying decisions you make.