Ask Your Employer to Offer Long-Term Care Insurance

I’ve tried to carefully lay the groundwork on this site to explain why long-term care insurance is the most cost effective way to pay for long-term care, something that most of us will need at some point in our life. It was necessary to lay that groundwork because every major survey comes back with similar responses:  a third of consumers think Medicare or health insurance pays for long-term care (LTC) and a significant number of respondents have no idea what pays for long-term care. Prudential’s 2010 LTC cost survey showed that only one out of four even listed long-term care insurance as a payment option (p. 21).

The other really disturbing response in the Prudential survey was that only 8% thought LTC insurance should be purchased before age 50 (p. 19). If you want this valuable coverage, you need to get it as early as you can. The advice you often hear from media personalities to wait until you are 60 is based on how policies worked 15-20 years ago. Today they are much more costly at age 60 and much harder to qualify for medically. Your employer can offer it to all employees age 18+ and usually there is a one-time opportunity to get it with limited or no health questions, a true gift from your employer. That opportunity may even be extended to your spouse. Your family members like parents, grandparents, siblings and adult children age 18+ are usually eligible to apply at the group rate; they just have to answer all the health questions.

Ask your employer to offer long-term care insurance that is qualified for the Long-Term Care Partnership which means if the insurance benefit isn’t enough, you can turn to Medicaid for help and protect assets equal to the benefits your policy has paid out.  Here’s the link to see if your state has a Long-Term Care Partnership:

Also make sure you buy the 5% compound inflation as that will make your benefits triple every 15 years. Insurance companies are charging more for that, and now is the time to get it while it is still affordable. If you buy a lower factor like 3%, be sure to bump up the daily or monthly benefit at least 50% above what you initially wanted. Why? With a 3% compound inflation factor, in 30 years your benefits will be half of what they would be with a 5% compound factor. (5% doubles in 15 years; 3% doubles in 24.)

It breaks my heart to see all the misinformation about this insurance when I see it saving families every day. Without long-term care insurance, families are heading for an emotional and financial cliff that is unlike anything you’ve probably ever experienced. Those of you who have been through it, please comment and tell me if I’m right.


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