Long-term care: other coverages you could explore


Long term care insurance is not for everyone. About a third of applicants are rejected, and that number is 40% for people aged 65 to 69, says Tom Beauregard, founder of HCG Secure, in Goshen, Connecticut, which develops and sells long-term care insurance. and short duration. “A good percentage are going to be rejected based on medical history, and a good percentage are going to look at the premiums and say, ‘Well, that’s unaffordable,'” Beauregard says. If you don’t qualify for a plan or can’t afford one, there are other options you could explore, including these six.

A group employer plan

Some employers offer long-term care insurance as a benefit. These plans accept people with medical conditions even if they were excluded from purchasing an individual policy.

Link to an annuity

There are several ways to link long-term care to deferred pensions. One way is a deferred fixed annuity with a long term care insurance rider. With this option, once you have demonstrated that you cannot perform two of the six activities of daily living, such as bathing or eating, the rider can be taken advantage of, typically increasing the pension payout by two to three times, says Marc Glickman, actuary and chief executive of Los Angeles-based BuddyIns, which sells traditional and hybrid long-term care insurance.

In some cases, depending on the annuity and the type of long-term coverage, you do not need to be medically eligible. It can therefore be a good choice for people with chronic, uninsurable conditions. But you need a substantial amount of money available to invest in the annuity, usually $100,000 or more.

Short-term care insurance

A less expensive option, which is not available in all states, is a short-term plan. It only covers care for one year or less, up to a daily or weekly limit, Glickman says. “The reason people use it is because they can’t qualify for traditional long-term care, and they’d rather be covered for the first year than not have insurance at all,” adds- he.

The plans can be a particularly good option for someone who isn’t eligible for long-term coverage due to poor health, or who is 75+ or a single woman. Unlike long-term care plans, short-term care insurance does not charge more for women. A 65-year-old man or woman could pay $63 per month for home care benefits of up to $1,050 per week. The cost increases the older you are and the more robust the benefits, depending on the American Long Term Care Insurance Association. Since many short-term care plans do not have a waiting period before benefits kick in, insurance can be used to cover the waiting period before a short-term care policy traditional long-term loan is paid.

Life insurance

Some life insurance policies allow you to pay for care from the death benefit while you are alive. A policy with accelerated benefits may limit the amount you can withdraw to 70% to 80% of the maximum death benefit, but some companies let you take it all, says Robert Eaton, senior actuary and consultant at Milliman in Tampa, Florida. .


On your own or with the help of a financial planner, you could figure out how much money to set aside for long-term care in a retirement or investment account. “Look at what investments you want to leverage first to pay for your care. You need to have a plan in place now, not when it happens,” says Brian Gordon, president of Murray A. Gordon and Associates, a long-term care insurer. broker in Bannockburn, Illinois.

A state with a plan

Or maybe you should consider moving to Washington State. In 2019, the state became the first in the nation to pass legislation imposing a mandatory payroll tax that will fund up to $36,500 in benefits for individuals and cover a range of long-term care costs starting in 2026.

The law was met with litigation and fierce opposition, which delayed parts of the implementation of the state program. Still, a number of states are watching Washington’s situation closely, says Howard Gleckman, senior fellow at the Urban Institute. “I think we will inevitably have a public social insurance program for long-term care, either state by state or at the federal level,” Gleckman said. “It’s not going to happen anytime soon, but it’s inevitable that we have to because it’s an expense that’s spiraling out of control.”


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