Paying for Long-Term Care – A Creative Approach

Medicaid word cloudThe business of selling long term care insurance has changed dramatically over the last 20-30 years, which in turn has affected how senior citizens protect their assets.

What was once a busy marketplace of more than 100 insurers vying for long-term care dollars, has shrunk to a group of fewer than 20.

This was because many insurers drastically underestimated how long their policy holders would live, and how many claims they would file.

As the Wall Street Journal reported earlier this year, the insurance industry is in the midst of something of a panic trying to cover its losses, which means that many senior citizens who have long-term care policies are seeing significant rate hikes, some as high as 90 percent.

This leaves them with an almost impossible choice: pay this steep increase or walk away from coverage you’ve been paying into for years, if not decades.

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The Five Year Look-Back Period: Its Meaning And Significance

Many times when talking to clients about planning for long term care they tell me that they are aware of something called the “five year look-back period.”  Unfortunately, many of these people have no idea what the relevance of this look-back period is.  This article will attempt to explain what is meant by that term and why it is such an important concept when planning how to protect your assets from the cost of long term care.

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