Long term care is a pressing need among senior citizen
nowadays, which is considered as a big financial blow. However, only a handful
of people managed to purchase insurance for long term care. To make things worse, more than 1/3 of
policyholders let their policies lapse and forfeit their benefits. It is shocking and alarming at the same time.
So what are the reasons behind this?
nowadays, which is considered as a big financial blow. However, only a handful
of people managed to purchase insurance for long term care. To make things worse, more than 1/3 of
policyholders let their policies lapse and forfeit their benefits. It is shocking and alarming at the same time.
So what are the reasons behind this?
According to the study conducted by Center for Retirement
Research, there are three reasons why policyholders drop their long term care
coverage.
Research, there are three reasons why policyholders drop their long term care
coverage.
First, is the way people perceive premium. Most people see
it as a financial burden rather as an investment. And these people fall into
the category called “Financial Lapsers.”
it as a financial burden rather as an investment. And these people fall into
the category called “Financial Lapsers.”
The second reason is this; people let their policy lapse as
a strategy. Policyholders who remain healthy believe that their risk of
requiring any form of long term care has decreased. Thus, they no longer see
the purpose of keeping their policy. The study refers to these people as
“Strategic Lapsers.”
a strategy. Policyholders who remain healthy believe that their risk of
requiring any form of long term care has decreased. Thus, they no longer see
the purpose of keeping their policy. The study refers to these people as
“Strategic Lapsers.”
Last but not the least is due to unplanned lapses brought
about by cognitive impairment. These “Forgetful Lapsers” fail to pay their
premiums due to their impairment and lose their benefits despite the fact that
they will most likely need care.
about by cognitive impairment. These “Forgetful Lapsers” fail to pay their
premiums due to their impairment and lose their benefits despite the fact that
they will most likely need care.
The results of this study are surprising and enlightening at
the same time. People with limited funds will most likely drop their long term
care insurance. There are no evidence proving that “Strategic Lapsers” exist.
Lastly, the study reveals that policy lapses are common among people with
cognitive impairment.
the same time. People with limited funds will most likely drop their long term
care insurance. There are no evidence proving that “Strategic Lapsers” exist.
Lastly, the study reveals that policy lapses are common among people with
cognitive impairment.
This only shows that a lot of people who drop their long
term care insurance are the ones who are in dire need of coverage. People can avoid this scenario by planning
accordingly and asking the help of their loved ones.
term care insurance are the ones who are in dire need of coverage. People can avoid this scenario by planning
accordingly and asking the help of their loved ones.
If you need help when it comes to planning for your future
long term care needs, ALTCP.org offers a free tool that can give you the most
relevant information today. Try our free tool now: https://www.altcp.org/quick-start.
long term care needs, ALTCP.org offers a free tool that can give you the most
relevant information today. Try our free tool now: https://www.altcp.org/quick-start.
Original article can be found here.