While this type of insurance has been around since the late 1970’s, it wasn’t until the late 1980’s and early 1990’s that purchasing long term care policies became extremely popular. See our article on the History of Long Term Care Insurance. It wasn’t until a few years ago that many people started cashing in on those policies and the result has been extremely controversial.
Insurer miscalculations
Insurers who jumped on the long term care insurance bandwagon 10 to 20 years ago sold the policies without reference points on how much health care would cost today. As such, they underestimated their exposure and many are now denying coverage simply because the costs are too great. Policyholders don’t care – and why should they? They purchased these policies – many times after insurers aggressively marketed the policies to them – and now expect coverage. Unfortunately, the controversy is starting to turn litigious. That leads to the question – is long term care insurance really worth the investment?
Will you need it?
It is estimated that many people will need some sort of long term care at some point in their lives. While non-seniors certainly need long term care, the majority of need will undoubtedly come from seniors. In fact, there are over 13 million Americans receiving some degree of long term care today and more than half are seniors. As the population continues to live longer due to improved medical technologies and medications, the need for long term care is likely to increase as well. Experts say that long term care insurance is worth the investment if there is likelihood that coverage will be needed. Read our coverage on How Much Do I Need. So, if there is an increased risk of illness in your family tree that requires long term care, it might be worth the investment. Since many policyholders are just beginning to cash in, it is still unclear as to how many policies will go unused. However, many say that just ‘knowing’ that you have coverage and won’t have to rely on family and friends for care brings a peace of mind that is worth the price. Only time will tell as to how many policies go unused and whether or not insurers step up to the plate and make good on promises made in the past.