Long Term Care Insurance Savings Depend on Asking the Right Questions

LOS ANGELES, CA--(Marketwired - Nov 21, 2014) - Asking questions is the simplest and most effective way of learning. Yet few people ask the right questions when it comes to long term care insurance planning?

"It's a new area and people are afraid they'll look ignorant and unsure when in fact asking the right questions can save you money and give you the assurance that you are working with an expert interested in your best interests," explains Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI) a national trade group.

The author of a dozen leading consumer guides all focused on retirement and long-term care planning shares questions consumers should ask. "There are questions you want to ask yourself as you start planning and questions to ask the insurance or financial professionals you chose to ultimately work with," Slome advises.

Slome advises beginning the process by asking, am I (or we) willing to accept some of the financial risk should a need for extended care arise? "Having insurance to pay some, say half of the cost, makes sense today and will reduce your insurance premiums," Slome explains. "People overlook the fact that they'll be receiving Social Security benefits and likely have investments today that will grow and can be used along with insurance benefits."

According to AALTCI data, a 65-year old purchasing coverage that will pay each spouse $8,000 in monthly benefits at age 80 could save 38 percent having coverage that pays $5,000-per-month with any necessary balance paid from their savings. "The 'all or nothing' approach to long-term care planning isn't one I'd recommend today unless you can afford it," Slome adds.

Another money-savings tip involves choosing long-term care insurance protection that allows you to increase your coverage in future years. "You secure a lower cost now and lock in your good health so you can add more coverage in future years," Slome advises. "If you are willing to examine your long term care plan periodically just the way you track your investments, definitely consider this option." Ask if the option is available because not all companies offer this feature he notes.

A couple both age 55 purchasing coverage where benefits grow one-percent annually with a future buy-up option will pay about $190-per-month for roughly $300,000 of benefits at age 85. "The 'one and done' approach where you select a 3% annual increase will cost about $325 monthly or 21 percent more.

Questions To Ask Your Long-Term Care Insurance Agent

"Don't let the small print become the big print, is a caution I like to share with consumers," Slome notes. "It's the small contractual print contained in your policy that matters when it's time to make a claim for benefits. Long-term care insurance policies are typically 40-to-50 pages and chances are you won't know how to interpret the various terms and definitions but an experienced professional will."

"Insurance companies do not sell policies directly to consumers so visiting their websites will merely get you a call from someone who likely favors their particular policy," Slome shares. "If you walk into a Ford dealership, don't expect the salesman to tell you the advantages of buying a Toyota or Honda."

Asking questions to determine the experience and expertise of the insurance agent or financial professional you are working with can benefit you in the long run, he adds. Two questions to ask include, how many years has the agent been selling long-term care insurance and how many insurance companies are they appointed with.

"Appointed is industry jargon that simply means the agent can sell that company's policy and earn a commission for doing so," Slome shares. "Policy pricing, options and features and even the health requirements vary so significantly today, you'll benefit from working with someone who puts your interests first and theirs second."

For no-cost advice or to compare long term care insurance costs and policies, connect with a designated specialist by calling the American Association for Long Term Care Insurance at (818) 597-3227 or visit the organization's website for information.

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