Considering long-term care coverage? Here’s a reality check

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  • Retirees with portfolios between $1 million and $4 million may be the most sensible market for long-term care insurance. It makes less sense for wealthier or less-advantaged people.
  • New, less-expensive LTC products include life insurance hybrid plans, LTC annuities, short-term care policies and “long-term partnership” programs.
  • Purchasing LTC insurance is not just for older clients anymore.
Gary John Norman | Getty Images

As more people are thinking about long-term care planning for their elder years, the industry is responding with ever more options.

However, complete coverage may be out of reach for most people. Younger generations are taking notice, whether to encourage their parents to prepare for possible late-life infirmities or to make preparations for themselves earlier in their own lives.

Increased interest

Long-term care has been a hot topic since about 2000, said Brock Jolly, certified financial planner and partner and co-founder at Veritas Financial. He attributes this increased interest to market declines, modern medicine keeping people alive longer and the evolution of the LTC industry.

Pricing insurance products has been tricky, he noted.

“The big unknown is how long the person may live,” Jolly said. “Life insurance is easy to price, because we have actuarial tables, but with long-term care it’s not about mortality, it’s about morbidity.”

Interest is escalating.

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