Do We Really Need Long Term Care Insurance in the New Year?

According to Jesse Slome, Executive Director of the American Association for Long Term Care Insurance (AALTCI), we all absolutely need long term care coverage.  Certainly as I look at my friends’ aging parents and grandparents as well as my clients on claim, this seems quite obvious to me.

And yet, because of the expense of the policies and the unpredictability of future policy costs, experts and insureds often focus on these problems rather than the larger issues of our high likelihood of needing care into the future and the terrible impact that has on our families both emotionally and financially.

We all agree we are living long lives. And we all agree our parents and grandparents at some point in their aging may end up needing care either at home, in an assisted living facility or ultimately in a nursing home. In our family, my father received care at home care for 14 years. He was a type II diabetic who ended up a double amputee. I don’t know how our family would have managed without his long term care insurance policy.  With that policy, my father was able to stay at home with his caregivers. It was a huge relief to him and a gift to us.

Baby boomers are expected to live longer than their parents making it into their 90’s and 100’s.  It is a common statistic that 70% of everyone over the age of 65 will require long term care. As the boomers age, we can expect that statistic to increase as well.

In past years, I have found it puzzling that long term care insurance has not been more strongly endorsed by financial gurus especially in light of the number of people needing care and the impact on the families emotionally and financially.

So it is interesting to hear that Mr. Slome anticipates a robust year for the purchase of policies.

Here are his 2016 predictions:

1. Overall, more Americans will purchase some form of long term care insurance protection in 2016 than have done so in recent years.

2.  Most will opt for linked-benefit products.  Linked-benefit products are typically life insurance policies that offer some form of long-term care or critical illness payout benefit. These policies will be more popular than traditional long term care insurance.  “The insurance companies are putting their energy and resources behind these products so the trend away from traditional LTC insurance is inevitable,” Slome adds.

3.  Rising Interest Rates Will Result In “Calm.”   After several years of stressful industry years, rising interest rates will be good for insurers still committed to the long-term care insurance marketplace.  “When insurers are positive, the good sentiment will filter down and overall, this sense of calm will be good for the entire industry.”

 

There you have it. Linked policies will be the trend for the future and it will be a strong year for purchasing coverage.

As a passionate believer that long term care insurance in any form is often a lifesaver for families with loved ones needing care, I’m delighted with this forecast.

Here’s to a happy and healthy new year for all. And to a year in which we take care of ourselves and protect those we love.

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