Short answer: Buy long term care insurance from a stable, proven insurance company.
Long term care insurance is like whole life insurance (or other cash-value life insurance.) You buy it and start paying on it years before you expect it to provide a payout.
Long term care insurance is not like auto or home insurance or term life insurance. If your auto insurer goes out of business, you’ll have lost coverage at that time, but you can go to a new insurer. All that you will have lost is the premium that covers a few months between the insurer’s going under and the end of your policy term (always within a year.)
If your long term care insurer goes out of business, your premiums paid over a number of years are gone. In addition, the cost of a long term care policy from a new company will be higher because you will be much older and health issues may have arisen.
(Note: I know that it’s hard to determine which insurer will be safe and stable long term, especially after the financial institution upheaval in 2008. Just do your best. If the company smells weak, or if it’s selling on low price alone, look elsewhere.)
Summary: A low-priced policy isn’t really a cost savings if the insurer goes out of business before you can use the policy.
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Jim Koewler (pronounced KAY-ler) has a law degree is from Indiana University. Jim moved to elder law in 2007 after a family member got help from an elder law attorney. Jim saw how the elder law attorney not only helped his relatives protect their life savings but also how the attorney helped relieve the emotional stress of a family member needing long term care. Jim changed his focus to elder law so that he can bring this same kind of financial relief and emotional relief to other families. Find out more about Jim at www.protectingseniorsnews.com