According to statistics reported by the American Association for Long-Term Care Insurance, only 400,000 long term care polices were sold in 2007. Does this surprise you? It surprised me! With long term care situations occurring at a greater frequency than a house fire or an automobile accident, it is hard to believe that more people are not insuring against the risk and the potential for a total financial loss. Is it because long term care is so cheap, and individuals feel they are well situated to pay for the care? Hardly! Long term care, whether it occurs in the home, an assisted living facility, or nursing home is very expensive The cost for one year's worth of part-time home health care can exceed the cost of a new car, and the cost of two year's worth of care in a nursing home can exceed the price of a new home.
So why do people insure their homes and cars against such a small risk, and leave themselves totally naked against a long term care risk - that is likely to happen? The answer lies in education. People need to be educated on the need for long term care insurance, and the opportunities that a good policy can provide them.
So what is in a good policy? A good long term care insurance policy will provide all levels of care, including: home health, assisted living, and nursing home care. The policy should also include an inflation rider - so that the future benefits stay current with future costs, a return of premium rider - which states that the insured's beneficiary(ies), following the insured's death, will get a full refund of the premiums that the insured paid to get the coverage, and a quick pay option - which eliminates the need to pay for the coverage for the rest of the insured's life (single pay, 3 annual payments, 5 annual payments, or 10 annual payments).
