According to Investment News in an article published this weekend, consumers are increasingly shying away from Long-Term Care insurance as the economy softens bank accounts and nest eggs across the country.  I’ve personally experienced both sides of the coin in this environment, with some clients clamoring for LTC insurance while others are now conserving just to survive.

Wealth Effects on LTC

The negative wealth effect is being felt by all but the most secured investors, with investments and savings at much lower levels than in past years.  Even savers are being pinched by interest rates below 1% on secure investments.

Clients who were wealthy before may now need LTC as part of their plan. Someone who lost a million dollars in this downturn may have fallen OUT of the self-insurance category and into the category of those who should NOT self-insure the risk of long-term care costs.  In the specific case that got me thinking about this issue, the clients were netting about $4 million per year with a business, but were considering long-term care insurance.  The business owner was insulted at the concept of LTC insurance, but was convinced by his children, who preferred to have the business pay deductible premiums instead of paying the entire LTC cost out of pocket.

Consider This

While many are insulted at the thought of paying premiums to an insurer when they may never need LTC, there is a case to me made for even the upper class to consider LTC insurance.  Particularly business owners, who may be able to have their business pay some of the costs of individual long-term care insurance.  You may request quotes below if you are interested in more information.