A new study by the Urban Institute that found the more affluent live longer reinforces the importance of long-term care insurance planning for middle-income and affluent Americans, says Jesse Slome, director of the American Association for Long-Term Care Insurance.
“If you live a long life, the likelihood of needing long-term care services increases exponentially,” Slome says. “Wealthier Americans have lower rates of heart disease, diabetes, stroke and other chronic conditions, which is good news, but also means they are destined to live long lives and face a real risk of needing care sometimes for months and sometimes for years.”
“Those with earnings in the top half of the U.S. population have seen their life expectancy increase by more than six years,” Slome says. “Those in the bottom half have only seen an increase of just over one year.”
The study highlights an important message that Slome urges insurance and financial professionals to share with their clients. Speaking to agents endorsed by the organization, the long-term care insurance expert shared, “having wealth means you are more likely to live a long life, but most have absolutely no plan in place to deal with the consequences and the financial costs,” Slome says. “Unfortunately, far too many retirees wait too long to even think about a plan. At that point their options are limited.”
He noted that most long-term care insurance policies stop accepting applicants at age 75 and that meeting health qualification requirements after age 70 can be difficult. “There are options available for short-term care insurance where policies are available into your 80s and health requirements can be easier to meet,” Slome says.
Group long-term policies give employees a more affordable option. They offer discounted rates, unisex rating (beneficial for women) and simplified underwriting. Although few true guaranteed-issue group plans exist anymore, simplified underwriting gives an option to some people who might not qualify for coverage on the individual market.
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