The Art of the Sale

Selling LTCi: 'Good, Better, Best' Approach Works

Saving money when buying LTCi is easy

LOS ANGELES, CA–(Marketwired – Oct 27, 2014) – No one buys a cell phone that’s five years old. Like cell phone technology, the world of long term care insurance has undergone significant transformation making older approaches to planning obsolete according to a leading industry expert.

“Meaningful changes to some newer long-term care insurance policies offer real savings and planning advantages,” explains Jesse Slome, director of the American Association for Long Term Care Insurance (AALTCI) a national trade group. Slome has just-authored a consumer guide appearing in the December issue of Kiplinger’s Personal Finance magazine.

“If you are between age 55 and 65, it’s important to think about the consequences of living a long life, into your 80s, 90s and beyond,” the author notes. “You have the most options available including long-term care insurance typically before you qualify for Medicare health coverage.”

Newer insurance policies now contain overlooked features and options for individuals in that age band, the expert states. “Life insurance policies rarely change and are relatively simple to compare,” Slome notes. “That’s not the case today when it comes to long-term care insurance where each company sets their own innovative policy features and decides where to price more competitively. I’ve yet to find a consumer who can do an accurate apples-to-apples comparison on their own.”

Good-Better-Best Approach To Long-Term Care Insurance Advocated

Some noteworthy changes in policy options make it advantageous for consumers to take what Slome refers to as the “Good – Better – Best” approach to incorporating long term care insurance into a financial plan. “The old approach of ‘one-size-fits-all’ was never appropriate and I believe it’s less suitable today,” Slome explains. “And, the ‘one-and-done’ approach where you buy coverage and never think about adjusting it works for some, but not if you are in your 50s and young 60s.”

The old approach of 'one-size-fits-all' was never appropriate and I believe it's less suitable today

According to Slome, ‘Good’ coverage involves selecting a fixed amount of long-term care insurance benefits. “Having some coverage is always better than having none,” Slome shares. “If you have savings, retirement income, future Social Security benefits your insurance may be enough to cover all costs or may supplement what you pay. You are co-insuring or sharing some of the exposure between yourself and the insurance company.”

The “Better” coverage Slome refers to takes advantage of some of the newer options now gaining traction. “If you are in your 50s, it’s certainly better to have benefits that grow over time because costs for care will undoubtedly increase,” he agrees. The Association reports that home care costs have increased about one percent annually over the past 20 years. “Today, I believe a great option is having a policy that increases one percent yearly but allows you to increase future benefits without having to re-qualify healthwise,” Slome shares. “Save now; lock in your health and have the ability to add more tomorrow.”

Long-term care insurance that includes an option where available benefits increase by a pre-determined amount, typically three percent annually, is what Slome refers to as today’s “Best” coverage. “If you can afford the cost, which can easily be double of what ‘Good’ coverage costs, this is well worth considering,” he suggests.