Updated Saturday, August 29, 2015 as of 1:00 PM ET

7 Myths About Long-Term Care Insurance

Until someone discovers the fountain of youth, one fact of life is unavoidable: We will all get older. And along the way, itís inevitable that many of us will need health care to help us rehabilitate, recover, or just have a good quality of life. In fact, experts say 70% of everyone who reaches 65 will need some type of long-term care during their lifetimes.

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Comments (3)
Killer stuff, Paul. Succinct; concise; correct. The hand-waiving and the head-in-sand that goes on in the LTC market--both buy and sell sides--is sometimes nearly unbelievable.
Posted by Thomas C | Wednesday, May 21 2014 at 12:43PM ET
The problem with LTC insurance is the inability to set viable rates that reaonably anticipate future claims. Our modern medicine keeps people alive without restoring them to vital health, thus and eventually,larger and larger populations will need long term care and for longer periods.

In generations past, elders were cared for by an extended family that lived nearby. Now, that is also less true. Initially, premiums were based on data sets that were coming out of that past. Indeed, these data sets never included all the people who would have had qualified claims had they had insurance, because they were invisible. Not having had that data, the starting premium rates for LTC were seriously flawed. The insurers walked into the product blind, as it were.

The increases we see in issued long term care insurance also reflect the fact that premiums can't be guaranteed for prolonged periods as demographics, mortality and family structures morph.

Long term care insurance was, initially, a logical idea. But like medicare, the premiums must come up as longevity, and all the health problems associated with it continue.

I believe that this is the reason that so many insurance companies exited the LTC business, or even went out of business, if they "specialized" in long term care. Frankly, Genworth has had a remarkable run, but this will probably end badly too. If I were to sell long term care insurance actively, I would be using a company where this type of insurance is a minor part of their total business, where the almost certain losses could be absorbed without hugh rate increases on inforce business, and the reputational loss that accompanies that practice.

Yes, I do question the actual viablity of the long term care insurance industry going forward. Mercifully, I wasn't a good enough salesman to sell a bunch of the stuff.
Posted by WILLIAM K | Wednesday, May 21 2014 at 2:12PM ET
LTC insurance is really a thing everyone is going to avoid and prefers not even to think of it when being young. Unfortunately life is not a bed of roses and lots of us face the necessity of the LTC sooner or earlier.If you do not have the insurance or at least an option - it will most likely drain your wallet, savings and most likely lead you to one of the lending services online, but it's far more reasonable to think of such cases in advance and purchase the policy.
Posted by Jull S | Saturday, May 24 2014 at 6:44AM ET
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