What is True Long-Term Care Insurance?

True long-term care insurance is NOT typically sold by most “financial advisors”. If you ask 20 of these people (or insurance agents) for information on true LTCi, 19 of them will give you details on LIFE insurance.

How can you determine if the policy you’ve been quoted is true long-term care insurance or something else?

True Long-Term Care Insurance – Distinct Features

1. Be described as “federally tax-qualified” and state that it is intended to meet the definitions of “section 7702B(b) of the Internal Revenue Code.” This means the policy has all the consumer protections that the federal government requires for true long-term care insurance. It also means that some (or all) of the premiums may be tax-deductible and the benefits are tax-free (in nearly every situation).  

2. Include some kind of offer for inflation protection. Inflation protection means that the amount your policy will pay will grow. It’s important to buy a policy that has some type of guaranteed inflation protection in order to try to keep pace with the increasing cost of care. Long-term care expenses will be greater in the future than they are right now. To try to keep pace with the increasing cost of care, regulators require that EVERY TRUE long-term care insurance policy offers some kind of inflation protection.  

3. Most true long-term care insurance policies do NOT include any type of a death benefit. There are some excellent long-term care policies that do include some kind of a death benefit. But the death benefit is low compared to the overall long-term care benefits. The best of these policies have long-term care benefits that are three or four times higher than the death benefit. And with the inflation protection, over time, the long-term care benefits grow to be as much as eight times greater than the death benefit.  

4. The best kind of true long-term care insurance is a “long-term care partnership” policy. This is a special type of long-term care insurance that can protect some (maybe all) of your assets (from Medicaid) if your policy were to run out of benefits. These special policies are available for sale in about 40 states. 

Sadly, much of what is published on the internet makes it hard for consumers to receive a fair comparison between true long-term care insurance and cash-value life insurance. A common theme I have seen on the internet is for “financial advisors” to exaggerate the cost of traditional long-term care insurance premiums to make cash-value life insurance seem more affordable.

Example of LTCi Misinformation

I’ve recently read an article by one of the most reputable retirement planning publications. The writer is a “retirement planner” (whatever that is) and he had a lot of initials after his name. The article compared true long-term care insurance versus life insurance with a long-term care rider. He wrote that a typical long-term care insurance policy for a couple costs $12,000 per year for only 3 years of benefits for each spouse. I was shocked by that statement. I have thousands of clients across the country. Most of my clients buy A LOT more than 3 years of benefits, and most of my clients pay much LESS than $12,000 per year. 

I was curious about which long-term care insurance policy he was selling that was so expensive. I searched for the writer of the article on the insurance commissioner’s website to see which long-term care insurance companies he sold policies for. Surprisingly, I discovered he was not even licensed to sell long-term care insurance. He was licensed to sell ONLY life insurance. He was appointed with 17 different insurance companies. All those companies sell life insurance with some kind of rider. None of those companies sell true long-term care insurance. He was not licensed to sell long-term care insurance with any company.

How did he come up with such an exorbitant cost for true long-term care insurance when he is not even appointed with a single long-term care insurance company?

Not surprisingly, the “retirement planner” wrote in the article that cash-value life insurance usually costs about the same as, or just a little bit more than, true long-term care insurance. Of course, that statement is completely false. 95% of the time, true long-term care insurance is about one-quarter the cost of a cash-value life insurance policy with some kind of rider.

Do not trust anything you read on the internet about how much TRUE long-term care insurance costs.

Get a real quote.

No phone is required.
No need to give your name.
No need to speak with anyone. 

Just click here and go to my Policy Finder. Answer a few basic questions, and one of my associates or I will email you a customized quote for true long-term care insurance within one business day.