When it comes to long-term care insurance, there are four major solutions to consider, Rona Loshak, a founding partner of Karp Loshak Long-Term Care Insurance Solutions Brokerage, said in a recent interview with TheStreet’s Retirement Daily.
According to Loshak, there are stand-alone plans; state partnership plans; hybrid plans, and annuities and life insurance with long-term care or chronic illness riders. Watch Evaluating the Four Major Long-term Care Planning Solutions in the Marketplace.
Before deciding on which solution is best, however, Loshak recommends getting a handle on your health. Carriers look at different health conditions and some carriers may deny coverage for certain health conditions that others may approve. “Many conditions are insurable,” said Loshak, who spoke recently at the annual Engage conference for the American Institute of Certified Public Accountants. That’s why she recommends working with a specialist who works with every carrier.
Next, evaluate your lifestyle needs. For instance, do you need a death benefit or a guaranteed minimum plan?
Once you have a handle on your health and lifestyle needs, you can evaluate the four major types of plan designs.
Stand-Alone/Traditional Long-Term Care
This is the plan where you pay premiums until you claim the benefit. According to Loshak, the market has stabilized over the years and is now dominated by mutual insurance carriers with good ratings.
“Those offer the biggest bang for the buck, and they have a lot of flexibility,” she noted.
There’s also something called a shared care plan which allows a married couple to take out separate plans that have an option allowing each spouse to become a “rider” on their partner’s plan. This, said Loshak, can be a good option for “for a healthy, married couple.”
There are policy features to consider such as inflation protection and nonforfeiture benefits. “There are different ways to design these plans that would fit into somebody’s budget,” said Loshak.
Another option, for some, to consider is the Long-Term Care Partnership Program. That’s a joint federal-state policy initiative to promote the purchase of private long term care insurance, according to the American Association for Long-term Care Insurance. That program is intended to expand access to private long term care insurance policy to pay for long-term care services.
Hybrid or Asset-Based Plans
A hybrid or asset-based solution is one that’s built on a life insurance chassis.
According to Loshak, it works like this: At the time of your long-term care claim, you first file against the death benefit. And then, once the death benefit has been fully exhausted, the policy will continue to pay an extended benefit under this optional rider.
“A lot of people …….