Long Term Insurance Showing High Rate Of Lapse
A recent study done by The Center for Retirement Research finds that the people who need long term care insurance coverage often let it lapse due to the high cost of premiums and a lack of perceived need. If you are considering purchasing this type of insurance, having money to keep up the premiums is key.
The average annual cost of nursing home care in a semi-private room is about $81,000, and it has been shown that over 54% of Americans will spend at least one year in long term assisted living. Even given the high cost of care and proven need, during the time period between 2013 and 2014, new sales of individual long term care policies fell twenty-two percent. For many, long term care insurance is just not affordable.
Even if you have prepared by purchasing long term care insurance, the average policy provides for three years of coverage, and many seniors need 5 or more years of assisted living care. The study concluded that thirty to forty percent of elderly persons should purchase this type of insurance, although few do and many of these policies purchased lapse before paying benefits.
How can a life settlement be a good alternative to long-term care insurance?
Long term care insurance is a means to a possible end, where premiums must be paid in order to have coverage. If you have life insurance, there may be a better option for you. By contrast, a life settlement allows you to obtain the funds you need through a lump sum of cash with no restrictions on how you spend the proceeds. There is no expiration of benefits, and no future payments are due.
If you no longer need or can no longer afford your life insurance, you can choose to sell part or only a portion of your policy with reverse life insurance. Life settlement companies will ask for medical records and details on your life insurance policy to determine the amount offered in a life settlement. A life settlement provider will order an actuarial life expectancy which helps the investor determine how much they can offer for your policy. Reverse life insurance can help you find out if you quality for a life settlement to assist you in paying for long term care.