What Can You Do If Your Long Term Care Insurance Is Obsolete?

SupplementIn the past couple of years several insurance companies have made major modifications to Long Term Care insurance.  A handful of insurance companies have stopped writing LTCI completely.  Those that still offer true LTCI have made significant adjustments.  At first glance is appears that LTCI is on its way to extinction.

Like many things, after you take a closer and calmer look, you will understand the evolution of Long Term Care insurance.


Long Term Care insurance (LTCI) first became popular in the 1980s.  It was too late to help my dad.  He died of Huntington’s Disease (HD) in 1988.  I did not learn about LTCI until 1992.

When LTCI was first developed, it was primarily designed to protect against the high costs of nursing homes.  Since then it has been adjusted, molded and added to with base benefits and riders.

Most LTCI policies today will not only pay for nursing home costs.  They also help with the bills associated with Home Care, Adult Day Care and Assisted Living Facilities.

In the past couple of years I have had to field several complaints from people who have LTCI but have still been stuck with a huge bill.  In almost every situation the fault lies with the insured.  An older LTCI plan that is priced to only pay for nursing home expenses will not pay anything for Home Health care.

If you have a LTCI that is more than 5 years old, I encourage you to blow the dust off of it and make certain that it will cover you the way you want.  If it will not, call a professional to help you find a way to supplement the coverage if that is what you want to do.


If you find that your existing LTCI plan is not sufficient, you do not necessarily have to replace it.

While a full replacement may be indicated, especially if you have a seriously old plan, you may only need to supplement what you already have.

  1. If you elect to use a true LTCI, you may only need to add a “Dialed Down” plan to your portfolio.  If you have an older plan that only pays for nursing home expenses and do not want to completely replace it, you can add a separate plan with a much smaller daily benefit that will pay for Home Health care.  In order to hold premiums down, you will probably want to elect a 365 day Elimination Period and add a rider that will waive the Elimination Period in the event you need Home Health Care.  Plans like this, even with a 3% inflation rider can be significantly less expensive.
  2. In the past couple of years, as insurance companies have left the LTCI market, several Life Insurance companies have started offering LTCI riders to their Universal Life insurance policies.  These policies allow the insured to claim the benefit either in the event of death or a Long Term Care need.  If you already need Life Insurance, these plans make ideal supplements.  Just do not be deceived.  The benefit is not for both Long Term Care needs and Death.  It creates one pool of money that you can either use when you die or while you are alive.  If you have specific debts that you are required to cover with Life Insurance, this option is not advised.  However, if the reason you have Life Insurance in the first place is non-specific, this type of supplement may be just what you need.

Warning:  Never cancel or replace a current insurance plan on a whim.  Take the time to think about your actions before you commit to anything.

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