The Secret to Getting a Great Deal on Long-Term Care Insurance

4 The Secret to Getting a Good Deal on LTC Insurance Header ImageShopping for long-term care insurance can be surprisingly difficult. It’s not like other insurance: Between the policy options, coverage estimates, spousal options, and inflation riders, long-term care insurance is in a class of its own.

That makes it easy to throw up your hands and leave it till later. But this would be a mistake – especially if you’re in your 50s.

Time really is of the essence

The number one way to get a better deal on your long-term care insurance policy is simple: do it now. Not only do rates go up as you age (because the likelihood of your needing the policy increase), but your coverage options start to dwindle.

Add in declining health, and you may find that the few extra years of waiting have cost you dearly in terms of your premiums – or even a policy at all.

By one estimate, 25% of applicants in their 60s are declined by insurance companies, and 44% of those in their 70s can’t get coverage. Some insurers won’t even consider anyone over the age of 75.

In other words, if you want to make sure you get access and your health is still good, hesitation is probably a bad idea.

But there’s another benefit to starting now

Having time also means having the flexibility to shop around for the right partner and the right policy.

Generally speaking, it makes sense to work with an insurance broker who really knows their way around long-term care. Because these insurance policies are unique (and uniquely complicated), it can pay to work with an experienced professional.

However, we don’t recommend working with just any long-term care insurance broker.


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If you want our advice, your broker should also be able to give financial advice

We’ll explain with an example.

Consider our clients Grace and David.

Watching Grace’s elderly and beloved aunt struggling with cancer, disability, and crippling medical expenses in her final years made healthcare planning a big priority for this couple. So when they initially came to us, they were looking for one thing and one thing only: a top-flight long-term care policy that could help them eliminate the risk of running out of money for medical bills.

But it turned out that a policy with all the bells and whistles wasn’t what they really needed.

When we compared the different coverage options, inflation protection plans, and costs, Grace and David – who are 54 and 57, respectively – realized that their “dream plan” would be far costlier than they imagined.

In fact, it would interfere with their ability to keep their savings momentum towards retirement!

So we looked at all the options, and we talked about some alternatives. After reviewing their finances, Grace and David’s Vitucci & Associates advisor helped them rethink their retirement savings plan and find a suitable (but cheaper) policy.

Here’s what they decided to do:

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  • Instead of relying completely on an insurance policy to cover the unexpected, Grace and David would set aside a portion of their savings for unexpected medical costs.
  • To help cover the shortfall, they decided to downsize from their family home and into an apartment after the kids moved out. This would free up some capital and reduce the benefit amount they would need to feel protected and comfortable.
  • Then, we designed a suitable investment strategy for their retirement nest egg that took into account other income sources, their expected retirement lifestyle, and their financial goals.

After laying down this critical financial foundation, shopping for a long-term care policy became much easier.

The long-term care policy Grace and David chose offered less coverage than they were initially expecting, but:

  • It’s a shared policy that provides both cost savings on premium and expanded coverage for them as a couple.
  • It’s significantly cheaper than the top-flight policy they’d imagined due to the lower benefit amount they required.
  • We were able to build in coverage at a lower inflation rate because of the investment strategy we recommended on Grace and David’s savings.

Each of these steps is small on its own, but it helped Grace and David find the right solution for their needs and update their financial plan at the same time.

That’s why we think it’s so important to unify financial planning and insurance planning: at the end of the day, they work hand in hand.

Remember, you have options

Like Grace and David, remember that starting early doesn’t just give you better rates and time to shop around. It offers you the opportunity to review your retirement savings strategy and plan accordingly.

You might find that you can easily afford any plan that you want – that’s great. But you could also discover that long-term care insurance is a balancing act that requires you to choose between eliminating every possible risk and just eliminating the risks that are most important to you.

For some of us, that might mean a policy that’s likely to cover full-time in-home care but not necessarily a nursing home; for others, like Grace and David, it could mean shifting resources to provide a cushion specifically allocated to medical bills.

The right policy and the right financial plan are all about you: your health, your options, your finances, and your priorities. So don’t forget to think through those angles – or work with a professional who can help to lead the way.

Are you really ready for retirement?

We spend years preparing for retirement, so why don’t we take some time to see if our plans hold water? Download our free retirement stress test guide today: it’ll walk you through the key questions and risks you should be thinking about as you assess your retirement readiness – and how to ensure that your retirement plan is ready for the long haul.

Don’t wait until it’s too late to shift gears: download our free guide and test your retirement preparedness today!


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Let Us Help!

We can discuss this topic and more at a complimentary appointment. As a bay area retirement planning coaches, we can give you a review and make suggestions based on your retirement objectives.

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Important Disclosures

& Associates Insurance Services or United Planners Financial Services (United Planners). The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by United Planners.

To determine which investments may be appropriate for you, consult with your financial professional. Please remember that investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk. Neither diversification nor asset allocation can ensure a profit or prevention of loss in times of declining values. United Planners does not render tax advice.

Securities and advisory services offered through United Planners Financial Services, member FINRA, SIPC. Pasquale Vitucci, CA Insurance Lic. # 0758212, is an Endorsed Agent of Vitucci & Associates Insurance Services CA Insurance Lic. # 0I06319. Vitucci & Associates Insurance Services and United Planners are separate and unrelated companies.
This page contains links to third-party company websites. By selecting a link, you will be leaving our website and launching a new browser window. These links are provided for informational purposes only and should not be viewed as an endorsement, sponsorship, solicitation or other affiliation with respect to any third parties. We are not making any recommendations or providing any advice on securities in particular or investments in general. Neither Vitucci & Associates nor United Planners Financial Services have reviewed the content of, and are not responsible for, the information or the results of the third-party websites.
Further Reading

Age and LTC insurance coverage: