Paul Ferraresi

Why do people buy long-term care insurance? There are lots of reasons. A recent policy holder survey in which current Mutual of OMAHA LTCi policy holders were asked what motivated them to purchase a policy.

The underlying basic reason was that it was helping people protect their independence and their life savings. Although the purchase of these policies is an emotional issue, here are seven common reasons people purchase LTCi.

See if any of these are the reasons you and/or your parents made the intelligent purchase.

1) They acknowledge they’re getting older and want to be prepared in case they need help. The policy holders want to maintain their independence as long as possible. They don’t want to rely on their kids to take care of them or make decisions on their behalf. They certainly don’t want to spend their life savings on LTC services.
2) They want to stay at home as long as they can. Remaining at home is a top priority for most people. No one wants to think about going to a nursing home. Instead, the policy holders said they prefer to receive the care they need in the comfort of their own homes.
3) They’ve seen what happens to people who don’t have it. Overwhelmingly, the majority of policy holders surveyed (78 percent) said they knew someone – either a friend or family member – who needed LTC services. They talked about watching these people struggle financially and seeing the physical and emotional toll it took on their families. And that was enough to make them say, “I don’t want that to happen to me”.
4) They don’t want their kids to take care of them. Many people interviewed had experience caring for a parent. These folks know how difficult it is to juggle family and work obligations while providing care for an aging relative. And that’s why they don’t want their own kids to have to care for them. People said over and over … “I don’t want to become a burden to my family”.
5) They don’t want to spend their life savings on LTC services. People know LTC services are expensive. They also know that paying for the care they need without the help of an LTCi policy could quickly deplete their life savings. And that’s not something they’re willing to risk.
6) They want to leave an inheritance for their kids. Many of the policy holders said they want to make sure they have something left to pass on to their children and grandchildren. One person said, “My long-term care policy is in my name, but it’s for the future of my children”.
7) They know it’s the smart thing to do. Many people interviewed said they view LTCi like other types of insurance.

They have automobile insurance to protect them in case of an accident, homeowner’s insurance to protect them in case of a fire and life insurance to protect their families if they die too soon. These folks know LTCi is just a smart thing to have.

One Reason Not To Buy

The survey also revealed one important reason many people almost didn’t buy a LTCi policy: they thought it was more expensive than it turned out to be. One policy holder summed it up saying, “I didn’t think I could afford long-term care insurance. But I found out it is less expensive than I thought”.

Investing in LTCi is not just through standard policies. There are innovative methods using existing or new annuities, life policies, programs that are paid up in 10 years, return of premium programs and countless other alternatives. If you or your parents are over 40 years old it is time to get serious about this. Procrastination leads to costs increasing in the future and, later you may not qualify. Ah, ‘tis better to have coverage and not need it, than, need it and not have it – you know the old … “Discipline of Regret”.