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5 questions to ask about long-term care insurance

Two generations unite

Fifty-eight percent of Americans say their biggest financial concerns are paying for long-term care and medical expenses, according to a new study from Life Happens. 

A long-term care insurance policy can pay for medical expenses related to a chronic illness or disability that may impact you for months or years. To get the maximum returns on a long-term care insurance policy, consumers should know what they expect from their policies and how to get the best deal possible.

See also: Health care costs rising: How to get smart about paying for insurance

Ask these questions before signing up for a long-term care insurance policy.

1. Can I combine my life insurance and long-term care policies?

Bundling insurance policies with the same carrier generally triggers a discount. According to the Life Happens report, 25 percent of consumers said they'd be very or extremely likely to bundle those types of policies.

"The findings show that consumers recognize the need for insurance products to protect their financial security," says Marvin Feldman, president and CEO of Life Happens. 

2. Will you raise my premiums automatically?

Recently, a large financial firm said it used something called "inflation protector" to automatically increase premiums among its clients — without notice. Now, more long-term care customers will have to notify their carriers if they don't want their LTC coverage to change — and that's a distinction you'll want to know about before buying long-term care insurance.

3. What are the most important characteristics of a policy that fits my needs?

Benjamin Offit, a financial planner and partner at Clear Path Advisory in Pikesville, Maryland, says long-term care consumers have a difficult choice to make when buying LTC insurance. "Do I want a cheaper policy from a not-as-strong company backing it, or do I want a more expensive policy from a stronger company backing it?" asks Offit.

Ask yourself these questions, and determine whether you want a longer benefit period with higher monthly premiums or an inflation rider.

4. Are you experienced with long-term care insurance?

LTC insurance is a complicated product, and you'll want to be sure your insurance adviser understands all the details. "You’ll want to know how long has the company been in the LTC insurance business and how long an agent has been selling long-term care insurance," says Christopher Kimball, founder of CK Financial Services in Lakewood, Washington.

When you choose a policy, expect to pay about $1,500 annually for an individual LTC insurance policy, and $2,400 for a couple's policy. A policy like this would generally provide a $150 daily benefit for a three-year benefit period.

5. What's the ideal age to buy long-term care coverage?

If this financial product is right for you, talk to an insurance professional and aim to buy one between the ages of 52 and 64.

See also: Long-term care insurance: When to buy?

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