Friday, August 28, 2009

Another conversation about LTC insurance

Today, I had another conversation with a representative who sells long term care insurance and other products (like Medicare Advantage) for several carriers. I was not aware that the AARP does work with competing carriers.

A male in good health at 66 might be able to purchase long term care insurance for something like $130 a month, but the rate would go up quickly with age. The underwriting procedure , following a needs analysis, is extensive and includes a cognition interview.

It makes real sense for anyone still working and, say, under 70 and making good money to try to purchase it.

The representative said that about 85% of LTC claims are for home health care rather than institutional care.

During the conversation, we both acknowledged that some day there might be a debate on “mandatory” LTC coverage for some people, and that states might start enforcing filial responsibility laws.

He mentioned that all Medicare supplementary coverage is divided into "types" with letter identifiers that are consistent for the industry. Many categories have extended skilled nursing care and overseas care.

It is possible for people with an analytical or artistic temperament to go out and sell insurance, and some artists and musicians do, he said. Yet, when I had my interview with New York Life in 2005, I was told that no other sources of income were allowed to agents, according to SEC compliance rules (probably aimed at preventing co-existing brokerage business). I am still confused about this, and welcome comments.

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