New Challenges for Those Approaching Retirement
Seventy percent of current nursing home residents deplete their financial assets within 12 months and 12 million Americans currently need long term care. How will increased life expectancy and rising medical care affect you and your family as you age? It is critical for your clients to think now about the best path for aging gracefully and with dignity without a devastating financial trauma near the end of life.
When a client is considering long-term care as an insurance option, many important questions come to mind:
* Should I invest in long term care premiums instead of making payments to an insurance company?
* Why spend money on insurance when I have assets to cover the medical costs directly?
* What type of long-term care policy should I buy?
*A stand alone comprehensive policy?
*As a rider to my life insurance policy? (This is not an accelerated death benefit)
*As an either/or feature in my life insurance policy?
*As an integrated single premium deferred annuity? (Usually requiring a $50,000 lump sum)
*As part of a disability income policy?
* What insurance carrier has the finest claim-paying history?
* How can I be sure the insurance company I select will be in business when I need to use the coverage?
* Are insurance carriers financially secure enough to pay-out on policies years down the road?
* What is the possibility I could be wrongfully denied coverage when I need it most?
While some Americans will spend all their assets on care, others plan to give money away or put it in a trust. By doing this, they have no assets and can qualify for Medicaid. This is a tricky business and the risks are enormous. Counting on Social Security is another shot in the dark, considering experts predict insolvency by 2019. In 1945, 42 workers supported each retiree in America; today, 3.4 workers support each retiree.
Your surest bet is to get reliable competent advice and a sound second opinion so that you and your family are fully protected in this new phase of life. Understand the legalese in your policies and make sure your financial future is secure by making educated and well-researched decisions.
With regard to long term care insurance, all insurers, brokers, agents, and others engaged in the business of insurance owe a policyholder or a prospective policyholder a duty of honesty, and a duty of good faith and fair dealing. The statute separately provides that the conduct of an agent "during the offer and sale of a policy previous to the purchase is relevant to any action alleging a breach of the duty of honesty, and a duty of good faith and fair dealing." Thus, the statutory duty of honesty, good faith, and fair dealing is owed to insureds and applicants and, unlike the common-law duty of good faith and fair dealing implicit in every insurance contract, is not dependent on the issuance of a policy.
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