As a lot of working adults are looking to buy long term care insurances to secure their health and finances in the future, how do you determine which plan and firm best suits you?
Long term care insurances have developed over the years, with more insurance providers giving plans nowadays compared to around two decades ago. While this means more options to choose from, it also presents a dilemma: if you are a working adult looking for long term care insurance, which would you choose?
Choosing the right provider appears to be a daunting task especially as their long term care insurance offers often times appear the same, in terms of benefits, choices, and coverage.
But sometimes, all the difference you need to spot is knowing what type of plan they offer, and how much it costs.
Types of policies and costs
Before even delving on which insurance firm suits you best, you should first have at least a basic knowledge of what long term-care insurance is.
Generally, a long term care insurance covers an applicant’s old age health expenses, either for beneficiaries staying at a nursing care centers or those who live within their own homes. Cost of a plan is determined by a lot of factors, from age of the insurance applicant, the average expected costs by the time the insurance would be needed, and the type of insurance.
Some insurance companies say that the average annual cost of contribution or premium for a long term care policy is around $2,727. It can go to as low as less than $1,000 per year, but that usually means a lower coverage of expenses by the time a person would get to use his or her insurance.
Also, as a common rule, less expensive long term care insurances comes with lesser perks compared to more expensive plans.
Various experts, from the National Center for Assisted Living and seniorliving.org, said that assisted living costs around $4,000 per month, or around $48,000 to $50,000 annually — for home care nursing.
However, the numbers increase depending on conditions that a beneficiary of old age care has, and additionally, if a patient would need assisted living in a nursing care center.
Policies also cater to different needs — there may be long term care insurances who turn down applicants whose family has a history of having Alzheimer’s disease — a brain disorder that usually appears in a person’s elder years, that leads to forgetting memories and inability to do even simple tasks.
Sometimes, the annual costs of assisted living in nursing centers can even go north of $100,000 — which makes long term care insurance a good investment especially if you and your financial and health advisors believe you need to get one.
A prospective insurance buyer should also understand that there are three different forms of insurance: the traditional long term care, hybrid long term care, and the short term care.
A traditional form has the most strict and stringent requirement, as these plans offer the greatest benefits. Short term care insurance meanwhile is a way to insure yourself, allows applicants who may have been rejected due to failure to meet the criteria to apply for a self insurance.
Due to short term care it being less stringent, insurance firms would ask an applicant to provide a plan on how the premiums could be paid eventually.
A hybrid format on the other hand offers more financial flexibility, as people availing for insurance and who might not be able to need assisted living or old age care through their life without can get their money back — funds being returned to a person’s heirs.
However, this extra layer of security — opening the possibility of earning back unused insurance money — obviously costs more.
Top long-term care insurance companies
Now that the types and usual costs of insurance have been identified, you can start picking your preferred insurance type and choosing which firm’s service you would tap. For us, we have listed information about five best long term care insurances, along with their benefits and pros and cons.
1. New York Life
Type of policy: Traditional, hybrid
Best for: Overall, or customers either looking for a wide range of options
- several offerings means there is likely a long term care insurance plan that suits you the best
- hybrid plans are offered, wherein the heirs of an insurance beneficiary who would not use the long term care insurance would receive a monetary benefit once he or she dies
- for traditional plans, an insurance beneficiary can place the policy for the benefit of another person, while several provisions of the contract for the plan may be edited, if it is with merit
- younger customers can get plans unlike other companies which offer their plans for people starting at a certain age, like 30 years old — which excludes younger individuals
- well known and reputable insurance firm, being the 71st country in the Fortune 500 list of top companies in the US
- there were complaints regarding website accessibility for older people, but some issues have been addressed as of now
- some say policy prices and monthly premium cost way higher — almost double compared to other insurance firms
Probably one of the top insurance firms across the state, New York Life prides itself for being in service for over 175 years. Accessing the right plan for you is easy, as they have customized plans depending on what state you are in.
You can view the list of plans by visiting its website at newyorklife.com, and by clicking the “What We Offer” option on the top level menu. Under it you can find long term care insurance, which would lead you to a selector where you can pinpoint the state you are in.
After which, the site would inform you what plans are available in the area. For example, in New York and California, New York Life offers its NYL Secure Care, a traditional form of the long term care insurance, but there are no long term combination products — or the so-called hybrid plan.
Other states like Florida, Ohio, and New Jersey have the Asset Flex program, a hybrid long term care insurance where subscribers can get back benefits should they decline using the long term care insurance, or if a beneficiary decides to opt out of the plan while still paying for it.
2. Mutual of Omaha
Type of policy: Traditional
Best for: Discounts and low rate of premium contributions
- lower costs of premium contribution compared to other similarly well-known companies
- high financial rating and good reputation across the state
- discounted plans for spouses
- inexpensive inflation protection mechanism, which shields beneficiaries from possibly investing too little by the time they need long term care insurance due to increasing old age care expenses
- limited options to choose from
- site is not accessible in some areas, plus not all information may be available online
- speaking to an agent may be unavoidable
The Mutual of Omaha is another established name in the realm of long term care insurance providers. With flexible plans which premiums may actually cost less than $1,500 per year, the Mutual of Omaha is a favorite among the elderly with its less stringent application process.
The company also offers an inflation protection option which comes in handy especially for applicants in their 60s or 70s, as beneficiaries can enjoy 3 to 5 percent inflation protection for a 20 year period insurance. This in turn helps you save more money because you no longer need to apply for inflation shields, which can increase your premiums.
3. Brighthouse Financial
Type of policy: Hybrid long term care, Life insurance with hybrid long term care
Best for: Easy benefits payout for beneficiaries not using long term care
- materials on website are easily understandable and not complicated, plus the wide array of information available
- long term insurance is combined with life insurances which give death benefits to the beneficiary’s heirs
- robust financial status as it is a byproduct of MetLife, one of the largest insurance providers around the world
- easy payout of death benefits under the hybrid program, as heirs would not need to sift through a lot of various requirements just to get the benefits
- allows customers to weigh their options — therefore not being too pushy with their products even on their own website
- availing for a long term care insurance coupled with a life insurance naturally means additional expenses
- policies sometimes may need to be bought through financial professionals
- several complaints across the state regarding various issues, from billings and payments, restrictive policy offerings
Brighthouse Financial is the arm of MetLife, a company that ranks 34th at the Fortune 500, that provides insurances to individuals. MetLife still provides insurance, but they focus on offering it to institutions, groups, or companies.
The two were separated to allow Brighthouse Financial to focus on individual plans.
Brighthouse is currently the 457th company at the Fortune 500 — making both companies inside the prestigious circle. According to them, they currently have over two million customers, with $235 billion total assets in comparison to liabilities of $214 billion.
4. Pacific Life
Type of policy: Hybrid
Best for: flexible options for applicants
- customizable long term care insurance plans in terms of where an applicant lives in while providing comprehensive policies
- hybrid insurance ensures the provision of benefits should a beneficiary opt to leave the long term care insurance unused
- flexible payment terms plus inflation protection
- easy to access website
- capacity to do corporate social responsibility provides hint of financial stability
- good feedback from customers
- slightly expensive cost of premiums with lesser benefits compared to other insurance plans at the same price range
- some complaints about lack of response to queries, plus accusations of bad performing customer care service centers
Also with a long history of providing long term care insurances, Pacific Life boasts of a robust financial status with assets amounting to $171 billion, with $2.7 billion benefits paid out in 2019 alone.
According to the company’s information sheet, there are over 853,000 members from various states. It also notes having various A credit ratings which makes it a viable option for people seeking long term care insurance.
5. Lincoln Financial Group
Type of policy: Traditional and hybrid
Best for: flexible options for applicants
- beneficiaries’ old age care expenses would be shouldered immediately as there is no waiting period, or the time it takes for a long term care insurance to kick in
- less stringent requirements prior to application
- income tax exemption for long term care insurance
- hybrid format allows the provision of death benefits for the beneficiary’s heirs should he or she opt to leave the long term care insurance unused
- competitive pricing, which means costing lesser than some insurances despite providing a wide range of options and benefits
- few customer complaints
- hybrid plans becoming too costly to be even considered in comparison to traditional counterparts
- cluttered website that may confuse people, especially the elderly, who is applying for a long term care insurance
Lincoln Financial Group’s insurance offerings are solid, and prices are reasonable enough considering the benefits that it provides a beneficiary. Care benefits are tax-free and hybrid plans ensure a high return of benefits should the long term care policy be left unused.
While its prime product, the MoneyGuard III is believed to be one of the best hybrid long term care insurance in the market, concerns are raised about its pricing — leading some to believe that it is no longer competitive.
So how do you pick the right insurance firm? As stated above, you have to look at what suits you best on a personal basis — which means that one plan may be perfect for you while others may lead to inability to maximize benefits.
If you are looking beyond these five examples, you have to consider a lot of things — from financial capability of the company, financial ratings, history, common complaints and if possible, legal history.
There are other thing to look at too: sometimes, two different insurance firms may offer almost the same long term care insurance at different prices. The higher price, however, may come with various other perks and discounts, plus an assurance that your investment is in safe hands.