My father passed away suddenly. His coronary took us all by surprise. In what I’ve now learned is a common occurrence, my mother’s heart gave out less than a week later. Neither one spent a day in a “nursing home”, which is good, because they didn’t have long-term care insurance.
What they did have was a great deal of pride. My father lost our family farm due to a stretch of bad weather that occurred just when he was expanding into dairy. Rather than declare bankruptcy he spent the next twenty-five years paying off his debts. ‘It would have been emotionally devastating for him to end up a financial burden on his children, or a ward of the state.
They were lucky.
They were both educated people. My father was the first in his family to go to college and my mother had a master’s degree. Yet, they never considered long-term care insurance.
Years ago I was traveling to a speaking engagement with the Insurance Commissioner of our state who would be on the same dais. He asked me, “What do you think of long-term care insurance?”
I answered, “When companies who can demonstrate a financial ability to be around thirty to fifty years from now start selling it, I’ll start selling it in my agency.” I followed that with a list of events that can cause financial disaster for an insurance company: Incorrect assumptions, loss of talent, hyperinflation, faulty regulation, unexpected and new underwriting risk, and others. My point was it takes a huge financial base to withstand those pressures.
That afternoon much of what I’d said found its way into his speech.
At that time the larger companies were not involved. Long-term Care Insurance was mainly sold by small companies, who specialized in the coverage. Many of them are long gone. Now it is sold by larger companies, who seemingly have the staying power to assure protection.
But, there are many other reasons my parents didn’t consider long-term care as a necessary coverage while you should. Underwriting restrictions are tougher today than they were than, but people are smart enough to start looking at a younger age.
Many people who tried to buy coverage years ago were declined. They’d waited too long. Now, a large percentage of people get the coverage through their place of employment at an early age.
Not that many years ago when you were diagnosed with cancer it was considered a terminal illness. Now, although late stage cancer is still terminal, many forms of cancer are treatable. That is the same throughout medicine. Due to advancements people become ill and require long periods of care. They live much longer and much of that extended life is in care facilities. In 1900 the average life expectancy for a white female in the U.S. was 49, today it is 80.
Alzheimer’s was a consideration back then, but nothing like it is today. One out of seven people over age 71 have some form of dementia.
Most families depended on one income so the thought of protecting the woman’s income was not part of financial planning. In 1960 only 22 percent of women worked, by 2011 that had changed to 66 percent.
The main difference is that people have greater wants today. The average annual cost for an assisted living center is over $40,000. They want alternatives and realize that long-term care insurance will allow at least that degree of dignity with aging.
Please click here for more info on how much LTC insurance costs.
Other Enhanced Insurance articles related to Long-Term Care Insurance:
Long-Term Care Insurance (With Video)
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