Long term care coverage is changing.....
The good news is that there are risks in life that are insurable; for example, premature death (while in good health)...the solution, life insurance; or, living long enough to require health care services...the solution, long term care insurance. Life insurance has been around for over 100 years while long term care insurance has only been around since the 1980’s. For that reason, the subject of long term care insurance is a changing landscape.
Insurer’s are still learning about LTC coverage and as a result, some of them have stopped issuing new LTC policies and temporarily put a hold on that line of business. Several of the reasons for this include; LTC policy holders tend to not let policy’s lapse (as opposed to life insurance policy holders who will drop policy’s in larger numbers); Americans are living longer than insurer’s predicted; and, a low interest rate environment is making it difficult for insurer’s to maintain and grow the reserves that they need to service claims.
This is a positive thing. Why? Because of current circumstances, some insurer’s are merely taking a pause and the one’s that are still in the market have already figured out how to make LTC viable. Insurer’s that have pulled out of the market will get back in, but will do so better positioned to take advantage of the opportunities; the demand for LTC products is too great for insurer’s to ignore. The lesson here is if you have a good LTC policy (“good” is a subject for a future blog) keep it and if you want LTC insurance now you can still get it.
LTC coverage is a critical component of a well designed estate plan. Out living your money due to high health care costs is one of the most common fears and frustrations of our clients.