THE PITALLS OF LONG-TERM CARE

For anyone who owns or plans on buying long-term care insurance, I suggest reading this. As an insurance agent of 42 years I DO NOT recommend this genre of insurance at all due to its unsettling performance and history.

Companies started offering this product some years ago as an instrument which might be used to defray depleting personal assets for the cost of nursing home care of toassist w/ activities of daily living. Enviable purpose? Definitely! Practical approach to solving this problem? By history, not really.

The premiums are not guaranteed for this product, except maybe some for the first few policy years. Because the insurance profession did not have the experience when designing same, no one ever foresaw the magnitude of the losses that took place (premium intake vs. claims paid out). A number of carriers in an attempt to circumvent this sought out and were granted regulatory approval to jack up costs quite exponentially to policyholders to cover claim losses.

I believe many insurers got out of the business and refused to write new coverage for these reasons. Existing blocks of business were either maintained or sold off for the fear of impacting financial positions of the varied carriers.

Do I feel this business is valuable? Yes, I do. The purpose is practical and enviable. However, until the offering insurers have a better way of underwriting and pricing the product I STRONGLY RECOMMEND AGAINST ITS ACQUISITION. In good conscience I can not recommend such a product due to the innumerable number of points which stand against it, by history, in relation to the pricing, performance and reality of ever claiming benefits.