For the first time, the dollar-value of yearly claims paid to long-term care insurance policyholders exceeded $1 billion. The annual report compiled by the National Association of Insurance Commissioners (NAIC) also showed the actual cumulative “incurred” claims being $11.1 billion through the year 2000 - the latest year which a report had been issued for cumulative totals. The industry is paying claims in record numbers. A fact the Consumer Reports article ignores. McCann agrees with Consumer Reports that shoppers should look at only top rated companies.
A rated companies. As far as cost goes, the cost is very small compared to the risk, ” McCann said.”No matter what age you are now, if you were to buy a mid priced long-term care policy you’d pay out less for your lifetime premiums than you would pay for one year in a nursing home. The best time to buy is when you are healthy and premiums are lower when you are younger. Most of my clients use long-term care insurance as a retirement planning tool … average age - 54, ” McCann explained.”A person buying a policy at age 40 will pay around $685 annually for a good plan.
You have paid during the 40 years $27,400, which is perhaps a half-year in a nursing home today, ” he said.”Now let’s say you stay self-insured … meaning you don’t buy insurance and you will pay out-of-pocket when the time comes you need care. Using the average cost of care cited in the article of $181 a day with a 5.6% rate of inflation, the daily cost of care in 40 years would be about $1600 a day! The $27.400 we saved by not paying LTCI premiums would only cover 17 days of care! So even a short period of time on claim you would get all your money back and more,’ according to McCann.
Responses to 'Consumer Reports article on long-term care insurance “out of touch” with reality.'