April 10, 2020

Shopping for Long-Term Care Insurance

Most of us don’t like thinking about all of those end-of-life documents and preparations. However, you and family members will be glad later if you take some time now to gather information and make some decisions.

Long-term care insurance (LTCI) is a product that might be needed before one reaches “old age.” So, looking at it in mid-life can have its advantages. A good place to start your search for LTCI information is at the NC Department of Insurance/SHIIP website at: ncdoi.com/SHIIP/SHIIP_Long_Term_Care.aspx.

At that website, there are several short publications to download or you may call the National Association of Insurance Commissioners at (816) 783-8300 (Option 2) to request a copy of the Long Term Care Guide.

Long-term care insurance protects the individuals/family from the high cost of long-term care and protects assets for heirs. Long-term care insurance is designed to pay some or all the costs of nursing home, community or home health care when you cannot meet the needs of everyday living on your own. While such insurance is costly and might not cover all of your expenses, it can help to safeguard your assets and protect your financial stability. It is not for everyone. If your only income is Social Security, it is unwise to buy a long-term care policy.

In general, you should purchase as much coverage as you can reasonably afford. Policies vary in their coverage features. Buyers must exam the written details of policies before purchase to avoid surprises later, like no inflation protection and to avoid misleading statements about coverage.

The Facts About Long-Term Care Insurance In North Carolina fact sheet (at above website) lists the NC requirements for LTC Policies and lists companies approved to sell LTCI in NC. It lists general shopping tips and describes features of some policies. A page is included to help determine if LTCI is right for you.

When people make application for LTCI, companies underwrite the policy either before the policy is issued or after a claim is made which is called post claim underwriting. Be sure the underwriting is done before your policy is issued. The insurance company will gather information about your health status to determine your risk and whether they wish to cover you. This will take some time.

Avoid post claim underwriting as the insurance company might decide you are too high a risk and they don’t want to cover your claim. They will refund all of your premiums and cancel the policy, leaving you unable to get any other coverage.

Finding a good policy from a good company takes some investigation and weighing of your needs and available features/costs.