Long Term Care Ltc Essay, Research Paper

Long Term Care LTC

Introduction

The product I selected is Long Term Care Insurance (LTC). Long-term care insurance is for the protection of individual and family investments. Customers always assume insurance is going to be expensive when it come to protecting your financial security. In this case it s worth the investment once you know what you can loose.

LTC insurance is marketed to individuals as a planning tool. It s the type of insurance you hope you never have to use. This insurance is similar to auto insurance, where you pay for protect against possible injury or damage. It s an investment that helps you hold on to your fortune once you enter into a long term care facility. LTC pays for nursing homes and rehabilitation facility expenses most people don t consider will ever happen to them.

Demographics

Current Market Situation over 65 Years of age 1999

The Pie Chart above shows how many Million Americans over the age of 65. It also shows the living arrangements for Americans to date.

In the next thirty years, 20 % of the population will be over 65 years of age, due to the baby boomer era. Based on statistics, at least 25% or more will require long tern care.

Growth of LTC facilities

There are estimates of 20,000 to 30,000 LTC homes in the United States, according to industry figures. The widening flood of Americans later life guarantees that long-term care facilities will be the 21st century growth industry. The market which was $86 billion in 1996, is expected to reach $490 billion by 2030.

Trends

Purchasing LTC insurance is a 50/50 gamble whether you will ever need this insurance or not. More and more people over the age of 65 not only need health care insurance, yet many forget about the long term care that may be required if a person is disabled or requiring long term care. Planning ahead can save individuals from their entire fortune being eaten up by the high the cost of long-term care facilities. Based on the cost of long-term care facilities, you might want to consider LTC insurance.

Insurance companies show what someone would pay by not having LTC insurance. They also use the words like What intelligent buyers need to know , making you feel stupid if you don t buy. However if you can afford the premiums, purchasing LTC insurance would be a wise investment. Buying LTC in your fifties will offset increase premium cost as you get older.

The product planning of LTC insurance offers the buyer the following benefits:

 Financial Security

 Peace of mind

 Excellent premiums if you buy in your early fifties. To date, many of the baby boomers are past 50 and have not taken the advantage of these low cost premiums.

 Some LTC insurance have inflationary benefits, so if the cost of LTC facilities increase by the time you need the care, you are still covered.

S.W.O.T.

Strengths

 Protects the Elderly income and finances.

 After the first 90 days in a LTC facility, the insurance picks up the cost 100% from then on.

 Gives peace of mind

Weakness

 Very costly insurance if you wait until you are in your 60 s.

 If you don t take the inflationary package you could be responsible for some of the care cost.

 You pay for years, then you are forced to stop paying for some reason. Here you would loose everything you put into it. When you start up again it will be at a older age premium.

Opportunities

 Buy LTC early in your 50 s.

 Take advantage of inflationary policies.

 Cheap enough is you buy early to put both husband and wife on separate policies.

Threats

 Company could go out of business if you re not with a reputable insurance carrier.

 Will there be space in a local facility when you need it?

Conclusion

After writing this article, my wife and I are looking into this type of insurance. Most of the information as well as purchasing this insurance can be done over the Internet. I would make this type of insurance a priority as well as making out a Living Trust Will for their survivors. Large corporations as added benefits should look into LTC insurance for their employees.

References

Elder Care: Making the right Choice. (1999, August 30) . Time Pp. 52

Long Term Care Insurance. (1999, August 25). www.prepsmart.com/longtermcareinsurance_investing.html

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