A woman in California recently asked me why one long-term care policy was almost twice as expensive as some of the other policies I’d compared for her.

It’s a good question and it reminded me of a story.

A few years ago, I compared several long-term care policies for  a woman in Florida.  She had applied for a policy with a leading long-term care insurer.  After she’d applied she thought she should shop around and compare to make sure she had made the right choice.

I first asked her about her health history because that can be a big factor in determining what each policy would cost.  She was in perfect health so she was able to get the lowest rates from each of the top long-term care insurers.

We then discussed the specific benefits that were in the policy she’d just applied for.  I wanted to make sure I did an “apples to apples” comparison for her of the main features of the policy, particularly the:  Daily Benefit, Inflation Benefit, Policy Limit, and Elimination Period.

I compared those same benefits with several of the top long-term care policies.

It turned out that the policy she’d applied for was the most expensive policy of the ten policies I compared. I showed her how she could get the same benefits, from a company with HIGHER financial ratings, for about 40% LESS premium.

Unfortunately, she did NOT take my advice.

She said, “Thank you for showing me that I already have the best policy.”

I asked, “How did I do that?”

She said, “The policy I have is by far the most expensive policy, so it must be the best.”

I was so surprised by her statement that I just wished her well and hung up the phone.

Most of us assume that the more expensive something is, the better it is.  That may be true for cars or laptops or smartphones, but, it’s not true for long-term care insurance.

Scot A. Olson and Carolyn E. Olson image

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