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Tuesday, July 31, 2012

MYTH: I can always buy Long Term Care insurance later

I know it must be irritating to you.  But I won't stop doing it.  That is, regaling you of the steadily shrinking options for reducing your financial risks.  The quantity and quality of techniques to protect yourself and your money are in an entropic spiral.
For example, I've mass emailed ad nauseum about the financial safe haven of annuities (which, not surprisingly, the Wall Street owned corporate press continue to trash).  My best company, Aviva, just reduced their minimum interest rate to 1%, making it not much better than the average CD (if it weren't for the additional benefits of tax deferral and guaranteed income).
Long Term Care risk management strategies have also been dragged onto the chopping block virtually every month.  Several big names have pulled out of the market altogether, such as Prudential and MetLife.  Others have discontinued lifetime benefits and what are called "limited pay" premium schedules.  Used to be that you could pay larger fixed premiums for 10-20 years thereby eliminating the risk of future rate increases.  All have increased their rates on new applicants and existing policyholders alike.  My own premiums have doubled in the last 10 years, but are still 1/2 the cost of a similar policy these days.  Pays to buy it early!
But sadly, the best buy in Oregon for healthy nonsmokers, United of Omaha, is discontinuing lifetime benefits, group plans, and limited pay options effective with applications signed by tomorrow, August 1.  They just told me this today!  They also implemented a healthy rate increase a month ago.
What does all this mean?  It means that long term care is a serious risk, so serious that it has the insurance companies running scared.  The good news is, if properly structured, sufficient protection is still very affordable.  With Federal deductibility of premiums and 15% Oregon tax credit, this type of insurance is heavily favored by not only the tax code but several other State and Federal provisions, such as the Partnership Program.


  1. The State's Partnership Program doesn't sound like any kind of a deal. It makes it look like having a long-term-care policy would be dis-advantageous by making it much harder to get medicaid if you need it, because you're so much further away from qualifying. Can you help with some explainations on that? Thanks, Gary!

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  3. No, there are several advantages to having private long term care insurance under the Partnership Program. See:


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