In a recent “Ask Suze Orman” column, Suze discussed the limited-pay option for long-term care insurance (LTCI). She explained that many people don’t know about this option and recommended it as a great way to pay off your premiums while you are still healthy and in your wage-earning prime.
We agree. A big advantage of paying off your premium costs in 10 years is that you will avoid the nasty surprise many LTCI policyholders with ongoing payments are encountering: Their premiums can rise sharply over time. A 10-year plan insulates you from that risk.
Keep in mind that if you buy a regular LTCI policy, it should include an annual inflation adjustment for the simple reason that costs rise over time and you are buying something today that you may not use for 20 or 30 years.
On the other hand, a limited-pay plan will be more expensive than a longer premium schedule, and adding inflation coverage will increase it even more. But if you can afford both the limited-pay and the inflation option, you will be in great shape.
You can save money by skipping the cash-back option that would pay the “return of premium” to your heirs after your death. It is an expensive option and the money is better spent on an inflation rider.
Call Allied Brokers for details about LTCI and the best option for your particular needs. Visit our website at www.alliedbrokers.com for information about all the types of insurance we offer. Or call 1-888-505-7988 for a free rate quote.
Suze’s full article appears in the November 2012 Costco Connection