Limited LTC Benefit vs Lifetime

NEW BRAUNFELS, Texas, Sept. 14 /PRNewswire/ -- Smart retirement planners understand the need for long term care (LTC) insurance. But how much do they need? Typical benefit periods are 2 years, 3 years, 5 years and lifetime (unlimited). Does someone need to purchase a lifetime benefit to feel secure? "Until recently, little objective data existed to guide consumers in answering this question," comments Ronald Hagelman, President of Republic Marketing Group, Inc. a national distributor of long term care insurance.

The results of a study conducted by Milliman Consultants and Actuaries tell us that consumers should feel very comfortable purchasing a limited-duration (less than lifetime) benefit. The study reveals, among policyholders with lifetime benefit periods, only 14% of claims last more than three years, and only 4.3% last more than five years.

What happens to a consumer who purchases a limited-duration policy, only to find his/her need for care lasts longer than the policy? That's when a policyholder may turn to personal assets, income, and/or a government program. "That outcome isn't a failure for the policyholder," says Barry Fisher, V.P. of Marketing at Republic Marketing Group, Inc. "Long term care insurance buys time while preserving money for the policyholder on claim. He or she enjoys years of private-pay choices, such as home-based care, while preserving assets and income. The Milliman study makes it clear: the vast majority of policyholders will never run out of benefits. And, even for the few who do, some coverage is much better than none."

The worst-case scenario? A baby boomer with dependent children suffers an accident or catastrophic illness, can no longer work, and needs many years of long term care. A new policy, Security Advantage(TM) Long Term Care Insurance, boosts benefits for claims that hit before the typical claims age of 85. For example, a three-year benefit can become a 12-year benefit for a baby boomer hit with an LTC claim such as early Alzheimer's, or M.S.

There's no need to overbuy when purchasing a long term care insurance policy. Current claims data shows that a policy with a 3-5 year benefit is a smart buy.