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Choosing the Right Long Term Care Insurance Benefit Period

by Jack Lenenberg

Long Term Care Insurance Options

As we have discussed, there are 4 key building blocks to a long term care insurance policy.  It is our experience that for you the most difficult decision is probably deciding upon your benefit period.  How many years of long term care insurance benefits do you feel you will need?  All long term care insurance policies will ask the policyholder to arrive at a choice.  For many, this will be a difficult decision.  How do we know how long we will need long term care services?  While we do not have a crystal ball to tell us how long we will need care, there are helpful long term care resources and statistics that can guide us to making proper long term care insurance benefit period choices.

LTC Insurance Benefit Period Choices

Long term care insurance companies will typically give the insured the option to select benefit periods of 2 years, 3 years, 4 years, 5 years, 10 years, or even Unlimited benefit periods.  Group long term care insurance plans typically offer 5 year benefit periods, although some group long term care insurance policies only offer 3 year benefit periods.  Thus, the individual policies will offer significantly more benefit period choices.  Also, most individual long term care insurance companies will offer shared benefit periods as an option for married couples, or partners.  With shared long term care insurance benefits the individual benefit periods are combined into a single pool of money that either or both partners can use.  Thus, instead of buying long term care insurance policies with 3 year benefit periods for instance, a couple can opt to buy a shared care benefit period of 6 years.  Many long term care insurance companies such as Genworth, Mutual of Omaha, John Hancock, Life Secure and Mass Mutual offer shared long term care insurance policies as a benefit period option.  So, with all of these choices how does one choose the right benefit period?

Studies of Long Term Care Insurance Claims

There has been extensive research on long term care insurance claims, and how long these claims typically last.  According to a study done by actuarial firm Milliman, Inc. 87% of all long term care claims are 3 years or less.  And 94% of all claims last less than 5 years.  Women typically need to receive more long term care than men.  For claims beginning at age 82, women have a 23% chance of exhausting a 3 year benefit period, while men have only a 12% chance of exhausting a 3 year benefit period.  For a female long term care insurance claim beginning at age 82, if a 3 year benefit period is exhausted, the average claim duration is 6 years.  Thus, for many people benefit periods of 3 years or 4 years or 5 years coupled with a proper daily benefit and long term care insurance inflation protection will address a large percentage of the risk of needing long term care.  Other factors, of course, should also be considered.  Is there a history of Alzheimer's disease in your family?  Can you afford to supplement your costs of care with retirement assets and retirement income?  Do you wish to preserve your nest egg for children and grandchildren?  These are all personal considerations that can impact your decision upon choosing the right long term care insurance benefit period.

We recognize that choosing the right long term care insurance benefit period can be difficult for you.  We really do not believe that there are any right or wrong answers, however.  For most people, limited duration benefit periods of 3 years to 5 years will work fine.  If you wish to have a little more peace of mind, you can opt for a longer benefit period, or if you are married you can consider shared long term care insurance benefits. 

We can help you compare your long term care insurance benefit period options.  For free long term care insurance quotes by the best long term care insurance companies such as Genworth, State Life, Mutual of Omaha, Prudential, Life Secure, New York Life, Northwestern Mutual, Lincoln Moneyguard, Mass Mutual and Transamerica, please call us toll free at 1-800-891-5824.  We look forward to assisting you explore your long term care insurance options. 

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Jack Lenenberg

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