The High Cost of Not Having Long-Term Care Insurance

 

Long-term care insurance is a crucial financial tool that can protect you and your loved ones from the significant costs associated with long-term care services. Unfortunately, many people overlook the importance of this coverage, leading to potentially devastating financial consequences.

Understanding the Risks

• Rising Costs: The cost of long-term care services has been steadily increasing over the years. Without insurance, you may be forced to deplete your savings or rely on family members to cover these expenses.
• Medicaid Dependence: If you're unable to afford long-term care out-of-pocket, you may need to qualify for Medicaid. This can involve a significant asset depletion process, potentially jeopardizing your retirement savings.
• Emotional Burden: The emotional stress of facing a long-term care need can be overwhelming. Having insurance can provide peace of mind and allow you to focus on your health and well-being.

Potential Consequences of Not Having Long-Term Care Insurance

• Financial Ruin: The cost of long-term care can quickly drain your savings and retirement funds, leaving you financially vulnerable.
• Family Strain: The burden of caring for a loved one can be physically, emotionally, and financially taxing on family members.
• Loss of Independence: Without adequate care, you may be forced to give up your independence and move into a nursing home.

Why Long-Term Care Insurance is Important

• Financial Protection: Long-term care insurance can help cover the costs of care, protecting your savings and assets.
• Peace of Mind: Knowing that you have insurance can alleviate stress and anxiety about your future.
• Flexibility: Many policies offer a variety of benefits, including coverage for in-home care, assisted living, and nursing home care.
• 
  
  
  
  

If you're considering long-term care insurance, it's important to:

• Start Early: The earlier you purchase a policy, the lower your premiums are likely to be. Be aware that some carriers have higher minimum ages than others.
• Evaluate Your Needs: Consider your family history, health conditions, and desired level of coverage when choosing a policy.
• Shop Around: Compare policies from different insurers to find the best deal for your needs. This includes "stand alone" polices as well as life insurance with living benefits, which can also help solve the problem of paying for these services.

By understanding the risks and benefits of long-term care insurance, you can make informed decisions about your financial future.

If you have questions about long term care, please drop us a note or schedule a short phone or Zoom appointment.

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. Please subscribe to this blog!

Indexed Universal Life: Combining Life Insurance and Market Potential

Indexed universal life (IUL) insurance is a unique type of life insurance that blends the security of a guaranteed death benefit with the growth potential of the stock market. It's a popular choice for people who want to protect their loved ones financially while also building cash value for the future.

Here's a closer look at some of the key benefits of IUL insurance:

• Growth Potential: Unlike traditional life insurance, IUL policies allow your cash value to grow based on a market index, such as the S&P 500. This means your cash value has the opportunity to grow significantly over time, potentially outpacing inflation and other savings vehicles.
• Downside Protection: IUL policies typically come with a floor rate of interest. This acts as a safety net, ensuring your cash value never loses money even if the market experiences a downturn.
• Flexibility: IUL offers flexibility in terms of premium payments and death benefit amounts. You can adjust these elements as your life circumstances change, ensuring the policy remains aligned with your needs.
• Living Benefits: Many IUL policies offer living benefits riders. These allow you to access your cash value while you're still alive, for purposes like critical illness or long-term care.
• Tax Advantages: The cash value in your IUL policy grows tax-deferred. This means you won't pay taxes on any gains until you withdraw the money. Additionally, any death benefit payout to your beneficiaries is typically income tax-free.

Here are some additional points to consider:

• Complexity: IUL policies can be more complex than traditional term life insurance. It's important to understand the features, fees, and riders associated with a policy before you commit.
• Costs: IUL policies typically have higher premiums than term life insurance due to the potential for market growth and added flexibility.
• Not a Get-Rich-Quick Scheme: While IUL offers the potential for higher returns, it's not a guaranteed path to riches. The stock market can be volatile, and there's always the risk of losing money.

IUL can be a valuable tool for those seeking a comprehensive insurance and savings strategy. However, it's not a one-size-fits-all solution. If you're considering IUL, it's important to consult with a qualified financial advisor to determine if it's the right fit for your financial goals and risk tolerance.

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. Please subscribe to this blog!

Do You Need Short Term Home Healthcare Insurance?

As we age, our chances of needing some form of long-term care increase. This could mean needing help with activities of daily living (ADLs) such as bathing, dressing, and eating, or needing more specialized care such as skilled nursing.

Long-term care can be expensive, and many people don't have the savings to cover the cost. This is where short-term home healthcare insurance can help.

Short-term home healthcare insurance* provides coverage for a limited period of time, typically up to one year. This type of insurance can help pay for in-home care, such as help with ADLs, as well as short stays in a nursing home.

There are many benefits to having short-term home healthcare insurance. Here are a few of the most important:

• It can help you stay in your own home. Many people prefer to age in place, and short-term home healthcare insurance can help make this possible. With this type of insurance, you can get the help you need to stay safe and independent in your own home.
• It can help you avoid out-of-pocket costs. Long-term care can be very expensive, and short-term home healthcare insurance can help you cover some of these costs. This can save you a significant amount of money, especially if you need care for a prolonged period of time.
• It can give you peace of mind. Knowing that you have short-term home healthcare insurance in place can give you peace of mind. If you do need care, you'll have the financial resources to get the help you need.

If you're considering short-term home healthcare insurance, there are a few things you should keep in mind. First, you'll need to make sure that you qualify for coverage. You'll typically need to be age 50 or older and have a good health history.

Second, you'll need to decide how much coverage you need. The amount of coverage you'll need will depend on your individual needs and circumstances.

Finally, you'll need to shop around for the best policy. There are many different short-term home healthcare insurance policies available, so it's important to compare rates and benefits before you buy.

If you're thinking about getting short-term home healthcare insurance, I encourage you to do your research and talk to an insurance agent. This type of insurance can provide peace of mind and financial security, and it could be the right choice for you.

Contact us about your options. If you have questions, you can schedule a short phone call with one of our agents.

*Plans are not available in all states.

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

Video: The Most Important Thing You Read All Day

Were you aware that this country has a looming retirement crisis? The truth is that far too many people are not contributing to any type of savings plan, including 401(k)s or SEP's. And far less have planned for long term care expenses, which could erode any savings that are in place. 

On top of that, only about 40% of people have the amount of life insurance they actually need, with many people not owning any life insurance at all. That leaves a lot of families in a precarious predicament if the breadwinner should die too soon or unexpectedly.

What if there was a way to make sure your family was taken care of while accumulating cash for a retirement "supplement"? Or, if need be, that money can be used for long term care costs. Would you be interested in learning about such a plan? Let us know by replying in the comment section or directly to the video. We can book a short phone conversation to answer any questions you may have. 

Watch our short video! 

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

Why You Should Plan For 3 Stages Of Retirement 2023

Two weeks ago I was asked to give a talk to a local networking group about long term care insurance, as well as other related subjects. Most of the material I discussed had to do with the products available to us, like long term care insurance, short term home healthcare insurance and life insurance with "living benefits" that can be used in the case of a chronic illness or cognitive impairment, like Alzheimer's or dementia.

As usual, I discussed the three stages of retirement which are the Go Go Years, the Slow Go Years and the No Go Years. Unfortunately, most people don't plan for the last part, which is what ultimately costs them the most money. 

Take a couple of minutes and watch the video below which covers a short talk on the subject. If you have any questions or comments, please post them below and if you can, please subscribe to our channel on YouTube. 

 

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life, disability, long term care, cancer, accident and other insurance coverages in North Carolina, South Carolina, Virginia, Tennessee and Georgia. He's also is a professional speaker helping sales people be more productive and efficient, and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

Wouldn't You Rather Spend Your Savings On Something Fun?

I recently had a conversation with a very nice couple from Greensboro, NC. They both worked as realtors, had three children and seemed like they were doing a good job executing their financial game plan. 

As the housing market has been doing well, they have managed to sell more in the last year. They both know that things won't stay this way forever, so they put aside a good amount of money each month for their "rainy day fund". Having the discipline to this and stick to it is rare to find these days, so I told them they were doing an awesome job. 

We continued to discuss their other financial issues. They had a decent amount of life insurance on themselves (they probably could have used a bit more) and had started a retirement account  as well. This was especially encouraging because it can be a difficult task when one, or in this case both, of the spouses are self-employed. Nobody is deducting money from their paycheck for them. 

I was starting to think they didn't need me at all. However, it didn't take long to discover there was one potential landmine that needed to be addressed. I asked them a basic question. "Do you have enough money put aside to help pay bills if you are sick or hurt and can't work?" 

They thought about it for a minute and said, "Well, we could dip into our savings." 

"You're right. You can do that. But is that what you are saving for? To cover bills?"

They hadn't considered this so I offered a better alternative. "If you couldn't work, you wouldn't have that income. Sure, one of you could pick up some of the slack, but do you want to go through that? Your savings should be for things you want down the road, like a vacation or to buy a nice car. No one saves to pay bills."

"Let's do this," I suggested. "Let's take a look at disability insurance. The premiums won't break your budget but it could keep you from having to go through your savings." 

They agreed to look at a few options. As we move through the process I'm sure they will both complete applications. And since they are both fairly young and healthy, they should both have policies to protect their paychecks soon. 

Are you setting money aside each month for a rainy day or something fun like a vacation or a boat? Do you really want to have to dip into that money to cover your bills? What if you could shift that risk to an insurance company and let them cover your bills? 

If you are a business owner, a contract employee or otherwise self-employed, ask an agent to help you find a disability policy that fits your needs. 

Special Offer: If you aren't sure how much disability you need, we have a one-page PDF that can help. To get a FREE copy drop a note to chris@surffinancialbrokers.com and we'll send it to you ASAP. 

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life, disability, long term care, cancer, accident and other insurance coverages in North Carolina, South Carolina, Virginia, Tennessee and Georgia. He's also is a professional speaker helping sales people be more productive and efficient, and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

7 Times When You May Need Life Insurance

There are times in our lives when we need to start looking at purchasing a life insurance policy. These are events that can make a difference in our lifestyles, spending habits and social habits as well. And many times these changes do not only affect us, but our loved ones and business associates as well. 

With that in mind, here is a list of times when you should start to seriously look at life insurance.

1. Married or getting married. This is a no-brainer for most people. Becoming a spouse means that, for most people, purchases and financial decisions will be made jointly. Homes, cars, and other large purchases will typically be in both names, as well as credit cards, bank accounts and various other items. Should one spouse die too soon or unexpectedly, the surviving spouse will be obligated to pay off any debts.

A friend of mine was widowed several years ago only to find out that his deceased wife still had a balance on a credit card he was unaware of. In his state, he was legally obligated to pay off her debt. Luckily for him, it was not a lot of money, but if it had been it could have affected his credit poorly.

2. Parent or about to become one. A comedian once said that kids are like really expensive pets. Nothing could be truer. The estimated amount of money to raise a child in this county varies from around $175,000 to $250,000, depending on which study you read.  No matter which source you choose to use, the numbers are high. And if you are planning to pay for education costs, the numbers can be increased from 50-100%, depending on the school your child attends.

When I sit with a parent and discuss their life insurance needs we take into consideration the costs of raising a child as part of the overall plan. A single parent could be burdened with a huge financial issue which can be easily avoided with a life insurance policy. 

3. Purchasing a home. While most people think of buying a home as a good thing, it can be a huge expense. Maintenance, repairs, taxes, insurance and other expenditures will sneak up on many new homeowners. Again, why leave your significant other with shouldering all of those expenses when it can clearly be avoided. 

4. Changing jobs. Depending if you are getting a raise or taking a pay cut, you may have to adjust your financial plan, including your life and disability insurance. If you are getting a pay increase, you may start spending more money, which incurs more debt. Taking a pay cut may mean you still have debt to pay but on less money coming in. Either way, making sure your loved ones don't get stuck with those bills is what life insurance is for.

5. Retired or planning for retirement. Many times I see people who have outlived their term life insurance policy, which is a good thing, but they still need some insurance for their final expenses and maybe some money for estate taxes. In these cases, people usually look into Final Expense insurance, but that can be pricey. If you are still healthy, a Guaranteed Universal Life policy can save a lot of money and accomplish the same goal. 

6. Newly single. If you are getting divorced and are obligated to pay child support, the court may want you to buy a life insurance policy with your ex as the beneficiary. 

7. Starting a business. Opening a business can be an expensive endeavor, and whether or not you have partners, you still may want to look into a life policy. 

I met a nice lady a few years ago who was up to her ears in debt because her husband decided to open his own medical practice. She begged him to buy a policy to cover the debt he incurred with rent, equipment and payroll. He kept putting it off and a few months later, while cutting down some trees in their yard, a log fell on him. She was stuck owing money that could have been paid out.

The same can be true of business partners. If one dies, the other partner(s) may want to buy out the deceased partner's interest. Otherwise, they may end up with the widow as a partner, which may or may not be desired by either party. A buy/sell agreement funded with a life insurance policy can fix that problem.

As you can see, a life insurance policy can help you and your loved ones avoid many problems down the road. And it can be less expensive than you think. If you want to see how much a policy can cost head over to our site and run a quote. In the meantime, please stay healthy!

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life, disability, long term care, cancer, accident and other insurance coverages in North Carolina, South Carolina, Virginia, Tennessee and Georgia. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

Does A Tax Free Retirement Plan Exist?

Keeping with the theme of taxes this week, I wanted to share some information on a life insurance plan and how to use it to your advantage when it comes to taxes, or should I say "tax avoidance". One product in particular may help you supplement your retirement without having Uncle Sam reaching into your pocket. 

First, I have to again give the obligatory disclaimer that I am not a tax expert and if you have questions or concerns regarding any of this you should consult your own tax professional. 

As an insurance agent I have worked with many products and, for the most part, my clients are made up of middle class people. Many of them are small business owners (less than 50 employees) or self-employed individuals in sales or other related professions. In a nutshell, I'm not working with a lot of millionaires.

Life insurance for most of these people is usually term, which is affordable, but does not offer many other features other than a death benefit. When I ask about their retirement plans they usually have a small amount of money put away, but not much. (After the Great Recession of 2008 many used their 401(k) plans to pay their bills). 

With this in mind, I let them know that life insurance has a special status when it comes to taxes. The death benefit is almost always non-taxable. Once people figured this out they started taking advantage of this and companies developed policies like whole life and universal life insurance that could build some cash value internally.

These policies also allowed for "over funding", which means you can pay additional premiums into the policy, over and above the stated price of the insurance, with the intention of having some money accumulating. The IRS made some guidelines to prevent the abuse of this loophole, by declaring a policy with too much premium going in as a Modified Endowment Contract* (MEC). 

However, permanent life insurance policies do allow one to access that cash value inside the policy. How they access the money is the tricky part (it's not that tricky) to avoid paying any taxes on it. 

Taking the cash out of the policy as a loan removes the tax burden on insured person because everyone assumes that the loan will be repaid. And if the person dies before repayment, that loan is deducted from the death benefit. And this is where these policies are most effective. 

Because that loan is tax-free, one can over fund a policy to its maximum (without becoming a MEC) and use that money as a "retirement supplement" without paying a dime to the government. 

Here is where I have to give another disclaimer. First and foremost, these are life insurance policies and NOT investment vehicles. For years when the interest rates were high, agents sold universal life as a way to make money instead of protecting money. This practice is frowned upon in our industry.

And since it is life insurance, an insured age, tobacco usage and medical history can affect the cost of the policy, as well as the cash accumulation. A 30 year old healthy non-smoker will get much more out of this plan than a 40 year old obese smoker with high blood pressure and diabetes.

Even though this can be done with a whole life insurance policy, the most efficient way to do this is with an indexed universal life (IUL) policy. I will acknowledge that there are detractors to these policies who see the problems from the past when traditional universal life policies failed to provide the cash when interest rates began to fall. 

The secret here is to structure an IUL properly from the beginning. If done properly, an insured can access the money in the policy in the form of a loan for many years. 

If you would like information on how to use a life insurance policy a tax-free retirement supplement, let us know. In the meantime, please stay healthy.

*When a policy becomes a MEC it also becomes taxable. Since no one wants that too happen we, as life insurance agents, will run an illustration to get as close to a MEC without having it become one. 

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog! 

Can Employees Get Tax Breaks?

Since it is tax season I thought I would share a few ways that you can use and maximize your insurance to help lessen or avoid a big tax bill over the next few posts. Some of these ideas may be implemented immediately, while others will help you down the road. Like a wise man once said, "If you fail to plan, then plan to fail."

First and foremost, I have to give the obligatory disclaimer that I am not a tax expert and one should consult their own tax advisor before implementing any of these strategies. Remember that tax laws are constantly fluid and can change as political parties rotate in and out of Congress.

Also, I want to let you know in advance that not all of these plans will work for everyone, but hopefully there will be a nugget or two in here for everyone. With that said, let's get started.

For those of us who work for an employer and are fortunate enough to have medical benefits, find out if those benefits are being "pre-taxed". Section 125 of the IRS tax code allows your allows employers to deduct your benefits from your pay before figuring out what your taxable income is. By simply moving your deductions "above the line" it can save you (and your employer) some money, with estimates around 20-25% on the costs of those benefits. The savings, in other words, come in the form of paying less taxes. And since your employer has to match your FICA* (Social Security) portion of the deduction, that can be decreased for them as well. 

If you have an enrollment company or a worksite insurance company providing ancillary products like dental, vision, disability and other insurance products, odds are they can set up and handle the administration of a pre-tax plan. Many of these companies will do it at no charge for your employer if there is a minimum number of participants. 

Be aware of a couple of items though. First, life insurance can not be pre-taxed. Since life insurance proceeds are generally tax-free to begin with, the IRS is not going to allow pre-taxing. Also, certain benefits can be pre-taxed but really should not be. 

I have seen businesses where their disability insurance, for instance, was pre-taxed. When this is the case, there will be a huge problem if an employee needs to file a claim, as it will be taxed as income. As most disability policies pay around 60-65% of a person's gross income, having that partial pay be taxed can be a financial nightmare for a family struggling to pay their bills.

Other deductions that are not necessarily insurance products can be used for pre-tax savings as well. A 401(k) plan can help you out down the road for retirement and should be implemented if offered. These plans were created in the late 1970's as a way for employers to create a tax-advantaged savings account for their employees. Unfortunately many employers replaced pensions with these plans, mostly because it saved the businesses a lot of money. 

If your employer offers a 401(k) plan take advantage of it and the tax savings that come with it. But be aware that it is not a true "retirement plan" and is basically a "savings plan". By allowing the employee to allocate their money as they wish, it also exposes them to a lot of market risk. 

After the debacle at Enron years ago, laws were enacted to heavily regulate the 401(k) plans. And after the financial recession of 2008 many employers changed their plans or did away with them altogether. Do some research or ask your tax advisor what is best for you.

The next few posts will continue on the theme of insurance and taxes so stay tuned. In the meantime, please stay healthy!

*There is a downside to saving all of this money on taxes by using the Section 125 plan. By reducing your taxable income while working, it also reduces your FICA contribution. This, in turn, can reduce your the amount of your Social Security check when you are eligible to receive these benefits. If you are paying less in, plan to get less out.

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

What Is The Current State Of Long Term Care Part 3

In the previous posts we took a look at what Long Term Care (LTC) is as well as how those who suffer from chronic illnesses are cared for in various types of facilities. As explained, stays in nursing homes and assisted living facilities are not cheap. Statistically 2 out of every 5 people will need some sort of LTC services, and the cost of those services is steadily rising each year. 

We also discussed a couple of ways to shift the burden of the expenses to an insurance carrier, through either a traditional stand alone Long Term Care insurance (LTCI) policy or a life insurance policy with living benefits. Depending on one's financial situation, age and health conditions, one option may be preferred over the other.  However, there are still another way to help cover the costs of LTC services. 

Short Term Home Healthcare (STHHC) insurance is a great alternative for those who possibly can't afford the premiums of a LTCI policy. As most people would prefer to stay in their own homes instead of a facility, a STHHC is an obvious choice. Especially with Covid wreaking havoc in nursing and assisted living facilities. home healthcare is a better option. But there is a caveat. 

The costs of home healthcare are much higher than staying in a facility. This makes sense if one considers that one-on-one care will cost more compared to a facility where several staff members watch over dozens of people at once.

As I mentioned in a previous post, my father suffered from Parkinson's Disease and insisted on being in his own home. His in-home care company was charging him in excess of $75,000 each year! He barely had the funds from his pension and some rental incomes and fell short each month. To subsidize the shortfall he was dipping into his home equity line, which our family was unaware of until he passed away. 

A better way to pay for the cost of home healthcare is the purchase of a Short Term Home Healthcare insurance policy. The cost of one of these policies is not nearly as expensive as a traditional LTCI plan and the application process is very simple. However there are a few drawbacks. 

The policy only covers in home care and for a total of 365 days. Given that some people only receive in-home care services a few days of the week, the 365 days don't have to be consecutive. In other words, the policy can be used over several years potentially. 

The applicant for one of these policies must be 60 years old and the rates do go up every five years, so these are points that must be taken into consideration. However, I still recommend this coverage to our clients who are looking into LTCI. 

For a good explanation of the policy and how it works, you can watch a short video by clicking here. 

Trying to self-fund long term care expenses is difficult for the vast majority of Americans. There is a myth that the government will take care of us, but it's not true. With our life spans getting longer it doesn't mean that the quality of life is better as we age. Making sure that we don't burden our families as our health declines should be a priority for most people. 

As we plan for our retirement years we need to seriously take into consideration that our health will decline and there will be expenses to deal with. Let us help you with planning and if you have any questions let us know. In the meantime, please stay healthy!

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

What Is The Current State Of Long Term Care? Part 2

In the previous post we looked at Long Term Care (LTC) services and when people need them. Included in that summary was how expensive LTC can be. As discussed, someone can work their whole life to build a nest egg of assets, only to have those assets depleted due to a chronic illness. The alternative is to shift that financial risk to an insurance company by taking out a policy while one is still insurable. 

We also covered one of the options which was a life insurance policy with "living benefits" or a LTC rider to help cover these expenses. One advantage of this is that if the insured should die unexpectedly, the policy will still pay a death benefit.

Another option is the traditional stand alone Long Term Care Insurance (LTCI) policy. These insurance policies have been around for a relatively short period of time and there have been a lot of changes over the years. And even though they are pretty comprehensive in that they can help pay for care in a facility or for "in home" care, they also can help pay for other expenses, like construction of a ramp or "informal caregiver" training, when a family member is involved. 

There are other issues that one needs to be aware of when it comes to LTCI. First, the underwriting process is different (as in stricter) when someone applies for coverage. The carrier may want to have a cognitive test done, for instance. I had a client get declined for coverage because he had a history of heart problems and smoked a few cigars each week. Separately they may not have been a problem but the underwriter put the two together and saw that as a potential risk. 

Also, most stand along LTCI policies usually have a provision that allows the carrier to raise the rates on the policy, unlike the previously mentioned life insurance which would "lock in" on a rate. After the financial crisis of 2008, several companies increased their rates on their in-force books of business, some doing it more than once. For those who are trying to do the right thing and plan ahead, this provision can come back to bite them.

Yet another thing to consider is that a lot of insurance carriers have gotten away from offering LTCI policies. These companies have either stopped selling new policies but still keep the old ones on their books, or they have sold the books of business to other carriers. This is due to the fact that when these policies were developed they did not have a lot of claims history to go on when setting the premium rates. As claims mushroomed, the number of carriers offering these policies shrunk. 

One more thing to be aware of is how these policies pay. Typically, LTCI pays claims as a reimbursement, which means the insured will need to send the bills for LTC expenses to the insurance company. Most nursing and assisted living facilities will take care of this matter for you, but remember that if you are a patient in one of these facilities you may need to rely on a family member to handle this. 

With all of that to consider, I still think that LTCI can be a great value as long as the client is aware of how they pay benefits and the multitude of features. A good agent will discuss all of this with a prospective client in detail and should also include other family members as well. These policies may seem expensive but can save you and your loved ones tens of thousands of dollars.

In the next post we'll look at one more option that is available. In the meantime, please stay healthy! 

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!