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I (Think That I) Can’t Get LTC Insurance – What Can I Do?

There are many people who are under the assumption that they cannot get LTC insurance.  Some because of medical concerns, and others because they applied once and were turned down.  Just like in high school, just because one gal declined to dance with you, it does not mean the next one won’t!

I have been asked to speak at both of the national LTC insurance conventions next year, on the topic of what to do in this situation.  First of all, perhaps the company you tried with may not have been the one who will accept the health concern you have.  Each company has their own separate criteria, and are often different from their competition.  You will get the most appropriate coverage by dealing with someone who represents many companies.

There are several companies I use that will accept someone previously declined for LTC insurance coverage.  Some of these are called “short term recovery care” policies.  They function just like traditional LTC insurance but because their benefits will last for only 360 days, just short of a year, they cannot be called LTC insurance.  This short benefit period also allows them to take a chance on health conditions that other LTC insurance companies will not accept.  Having 360 days of coverage is far better than having nothing.

Next is a product that combines an annuity (fixed interest, similar to a CD) with a LTC benefit.  Your money earns a competitive interest rate, and when LTC is needed it returns your money from the account over 24 months.  Once your account is zero, the company continues to provide the same monthly benefit from their pocket for 36 more months.  If your plan is to pay out of pocket if care is needed, then this strategy lets two years of your money last for five years.  If you never need LTC, the money is yours to withdraw  with remainder going to your named beneficiary at death.

My next strategy is for people who are already receiving LTC services, either at home or in a facility.  It is a life income annuity that will make monthly payments guaranteed to last for life, from a single sum deposited.  By taking your (poor) health into account, and thus your shorter than average life expectancy, a person who already needs care can get a quite large monthly payment for life from a relatively small deposit.  The worse your health, the better the deal.

Lastly, if nothing else works and you must spend down to Medicaid impoverishment, at least protect your burial funds.  Medicaid requires one to spend down to $2000 of assets.  At death, family is often left to pay for final burial expenses.  however, in Wisconsin, you can set aside up to $15,000 into a properly set up irrevocable trust (which I can do for you).  This money cannot be withdrawn for any reason until death, but then is immediately available to pay for final expenses.  This relieves your family of this bill and gives them complete control of where and how much to spend.  What is not used is refunded to your estate.

As you can see, there are many ways to address the problem of paying for LTC, even if you did not purchase insurance in advance.  Learn more at www.TheLongTermCareGuy.com

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The Long Term Care Guy