I often cringe when I see a newspaper or magazine article that discusses long-term care because so many include misleading or outdated information. I was pleasantly surprised when I read this Wall Street Journal article. My approach—and my qualifications—are very consistent with what was outlined here.
Wall Street Journal Reports Monday February 8th, 2021
Long-Term Care Insurance: First, You Should Find an Agent
Ask Encore: By Glen Ruffenach
I’m thinking about buying long-term-care insurance. Can you recommend a particular insurer or type of policy?
Actually, your best first step is not to shop for a carrier or policy. Rather, it’s to shop for a knowledgeable, independent agent.
Before we get to the particulars, let me pause and emphasize how important this topic is. One of the biggest financial mistakes that older Americans make is failing to plan for long-term care: what type of help they might need, how long they might need it, and how they are going to pay for it.
“I don’t need Long-Term Care right now, I’ll deal with it when the time comes!”
I have spoken with many retirees through the years who simply are in denial (“I won’t need long-term care”) or are playing a waiting game (“I’ll deal with it when the time comes”). Both attitudes can put you and your savings at risk.
The Department of Health and Human Services, in 2016, estimated that about half of people (52%) who reach age 65 will require some type of long-term care and incur, on average, $138,000 in costs. In 2017, PricewaterhouseCoopers, after examining claims submitted to eight major insurers, put the figure at $172,000.
So, I applaud that you’re thinking about this. But please: Take a step back. Long-term-care insurance, as you’re probably aware, is a ridiculously complicated product, one that comes in many shapes and sizes. As such, an independent agent—one who sells policies from multiple carriers and who specializes in long-term-care planning and insurance—can help you navigate these waters.
How to find such a person? First, there are several educational and training programs for insurance agents and other financial professionals that focus on long-term-care insurance. One of them, Certification for Long-Term Care, has a locator on its website that identifies its graduates across the country.
Second, search online for experts in or near your locale. (Example: long-term-care insurance specialist in your town or city.) And third, ask other professionals—financial planners, accountants, tax lawyers, estate planners—if they have worked with a long-term-care specialist.
Ideally, this exercise will generate several names. The next step—one that, admittedly, will take some time and effort on your part—is sitting down with these individuals and talking about their education and background. Here, what you don’t want, says Bill Comfort, a long-term-care insurance specialist in Durham, N.C., is someone who jumps immediately into policy features and premiums. Rather, you’re looking for an adviser who, first, takes time to understand your situation and needs and, second, can explain how various types of coverage might help.
Of course, you also will want to gauge how much of a “specialist” each candidate actually is. This means, Mr. Comfort says, asking about, among other issues, their experience (How many years have they sold LTC insurance? How many policies a year?); the number of carriers they represent (“captive” or “career” agents typically represent just one insurer); and their ability and/or willingness to sell different types of policies, including both traditional LTC insurance and “hybrid” policies, which combine LTC benefits with, say, life insurance or an annuity. (See a comprehensive list of questions on Mr. Comfort’s website.)
And…see if the agent, at some point, gives you (or directs you toward) a copy of “A Shopper’s Guide to Long-Term Care Insurance.” This 71-page booklet, published by the National Association of Insurance Commissioners, is a terrific resource. More to the point, the introduction reads: “Most states’ laws require insurance companies or agents to give you this Shopper’s Guide to help you better understand long-term-care insurance and decide which, if any, policy to buy.”
Yes, you can find this guide yourself on the association’s website. But an agent who takes pains to share this with you when you first meet could be a keeper.