Long Term Care Insurance: A Looming Problem for Baby Boomers

Living in a segment of town where there are a number of retirees renting their own homes make me wonder how fail-proof their retirement plans are. I wonder if they have planned for a rather long retirement phase ahead, as most of us will live longer than our counterparts in generations preceding us. I wonder what they used for their retirement plans, if they worked and put aside money in their 401K or equivalent pension plans, or if they invested their money and are living off of interest or monthly payments from the investment. I wonder how many of them take up odd jobs to keep the rent paid, and what those jobs construe. Retirement is both fascinating and frightening because it can seem like a daunting task to live several decades of your life without an income stream that is an active job you currently hold.

If you are a baby boomer, chances are you've already made your decisions on retirement plans. The Baby Boomer segment in the US has long been touted as the largest group to enter retirement with the most amounts of problems in long term care and Medicaid access. Many of us know that Medicaid is not sustainable in the long run, which makes the case for long term care for boomers even worse. This is because when the largest group requiring long term care retires, the ratio of working age to elderly population will be at its lowest. The tax base that ought to be providing the source for Medicaid funds will be the smallest in 80 years. This is a very bleak picture that has serious implications with very few concrete solutions. Long term care insurance can hedge against these problems, especially because Medicaid only steps in once a senior has spent down almost all their assets and retirement income. 

An interesting notes on the issue however, is that many boomers who can afford long term care insurance have still not bought any. Many boomers might think it unnecessary but LTC insurance covers an important segment of long term care that is the most expensive item on the LTC list: nursing home care. Nursing home care and home health care coverage are now standard on almost all LTC policies. 

As we all wait for the Federal Reserve to announce its decision on its updated economic policy, many are anticipating its call on the reduction in bond purchases if it decides that the economy has been faring well for itself and could do with a reduction in stimulus packages. With so much uncertainty looming in the economy still, it might be best to self-insure against long term care expenses right now while the market is still relatively stable. Last year, some prominent long term care insurance players including Prudential, Unum and MetLife disbanded their LTC offerings, saying that it wasn't a profitable enough business segment to offer any more new policies to new consumers. Before the supply of long term care insurance diminishes further or worse, becomes prohibitively expensive, look up some quotes and consider purchasing a policy if you are a boomer nearing or already in retirement.

The statistics predict a glut of boomers spending on nursing homes about 30 years out from now. This group includes forty year olds as well, so if you think you're too young to even consider LTC, think again! The need for long term care will come upon you closer than you think.

Author bio: Frank Mitchell has worked as a life insurance agent for 10 years. After an accident in 2011 that kept him at home for more than a year, Frank started offering advice on forums and other social media networks. He now works as financial advisor and in his spare time writes articles on subjects he is passionate about. On the weekends, you’ll find Frank dirt biking.

Reference:

http://www.acli.com/SiteCollectionDocuments/ACLI/PDFs/Public%20Affairs/LTCBabyBoomers05.pdf

http://www.cbsnews.com/8301-505146_162-57393433/prudential-quits-individual-long-term-care-biz/

Buying Long Term Care Insurance Should Be Taken Seriously

People who decide to buy a long term care policy are said to be good decision takers. But usually they tend to make mistakes and ignore the importance of buying process. This leads to having insurance that does not make a great difference. If you are thinking of buying a policy then it is important to be a good buyer and take the process sincerely. 

There are a number of factors that need to be considered. You are preparing for situations where you might need a caregiver for doing all your daily tasks. This means that you will need money to pay for the services which should not pose a burden on you. Thus, a long term care policy bought in the right way can prove to be beneficial. 

Understanding What Is Best For You

When you start searching for a policy, the first thing that comes your way is the sales brochures of companies. Insurance companies design brochures to give you an overview of their offering. It has the benefits of buying insurance from them and thus it is not advisable to simply pick one which you find more appealing. The information is incomplete until you know everything about the policy. Thus, it is important to be engaged in the buying process and do proper research. 

Searching for the Best Option

Research is one thing that people often ignore as it involves a lot of efforts. However, it is important part since this helps in taking the right decision.

• Talk: You need to talk more with people around you to get information. You can consult your family members, friends and colleagues. Some would be having a long term care policy and therefore will be able to help you get deeper. 
• Ask: Since everyone you talk to is not an expert from insurance field, their knowledge is limited to options they know about. It is important that you talk to company representatives. Though they will tell you good things about the company and its offerings, if you start probing them, chances are you will get answers to some of your queries. But this is not the end yet. 
• Discuss: When you are done with the basic knowledge, time is to know how a policy will help in your case. You should discuss your financial and health status with the agent and ask him to provide solutions. Once you have different solutions in hand, you must get into comparative study. 
• Study: This is an important part since it will help you know about the process, coverage and the terms and conditions a company has. There are some who will offer coverage for a limited number of diseases. Also, some of them allow payouts to certain formats of long term care. 
• Know: When you have studied the policy options, you must be aware of your requirements like coverage value, its duration and when will it get activated. 

One can also opt to go online to research about long term care insurance. This facilitates quick information and less influence by company representatives. Thus, insurance buying process must be taken seriously to ensure hassle-free future.