Long Term Care

Several studies have shown that up to 70% of those who reach age 65 will require care services at some point. For example, according to the Wall Street Journal, statistics show 70% of those who reach 65 will need long-term care (see http://tinyurl.com/knq3csz). Without protection, seniors are placing their savings and estates in jeopardy.

The problem is that long term care insurance is very costly. Many beneficiaries pay $300 per month for premiums and costs are subject to increase. For example, KTVZ recently reported that approximately 30,000 Oregonians will see their premiums increase by an average of 26% in the near future (see http://tinyurl.com/kmkdrsw). With expensive premiums and no guarantee of future rates, long term care insurance is not a viable option for most of us.

An interesting alternative to long term care insurance has been gaining in popularity recently. Although it doesn't work exactly in the same way as LTC insurance and is not a perfect substitute, it does provide a much more affordable option with many of the same benefits. This alternative is - get ready for it - a specialized kind of life insurance. But it's not just any kind of life insurance. It's life insurance that you can use while you're still living and is known as life insurance with living benefits. This is how it works.

The policy includes a death benefit, just like traditional life insurance policies. You have the choice of term, universal or whole life policies, just like you do with traditional life insurance. But these specialized policies come with a built-in rider where a portion (usually around 80%) of the death benefit can be accessed for certain events. Many critical, chronic or terminal illnesses qualify to access the benefit. Of course, most of the time, those who need long term care have been diagnoses with either a critical, chronic or terminal illness. It's not a perfect overlap, but it's relatively close.

Benefits vary greatly by plan so if you're interested in looking at this as an alternative, make sure that your agent considers several of the most competitive plans for your needs. Prices are generally slightly more than they would be for life insurance without the rider, but are normally far less than long term care insurance would be.

Since life insurance has guaranteed rates, your rates will not increase for as long as the policy is in force. We recommend whole or universal life for this application except under certain circumstances. This is because term insurance is designed to expire at some point - and would be expensive and may very well be difficult or impossible to qualify for later on.

For more information, please contact Don at 541-280-7170, or call your local insurance agent if you already have one. Just make sure they are aware of the products and have experience with them.