Your chances of living longer have greatly increased. With that blessing comes new challenges such as how you will live and if you will be able to stay in your own home. 

Long term care insurance, which aids you in caring for yourself during your old age, could be the most important decision you will make for the rest of your life.

Because of the complications in buying long term care insurance you need to be wary of the 7 most deadly traps that could rob you of your independence.

Trap #1: Not checking out the background of your insurance agent; this is critical.

This is not car insurance or a homeowner policy that can be switched from company to company. You will be making a long investment in your future and you don’t want to waste money and time.

Just because you have an agent you like who handles your car insurance doesn’t mean he or she will be able to guide you through this complicated maze of potential policies. Getting the right agent who knows what he is doing and is honest is absolutely vital.

Only deal with those agents who have clean records. The best way to research them is with your state insurance regulator. You can also check with the American Association for Long-Term Care Insurance (aaltci.org)

You might also want to consider reading “Insider’s Secrets” consumer buying guide and watching the accompanying videos.  Written by an ex-agent it teaches you as much or more than most agents even know.  This is a quick way to put yourself in the drivers seat.  (Learn more about the guide.) 

Trap #2: Not researching the insurance company thoroughly

You want to make certain the insurance company has a low complaint ratio, and does not have a history of increasing the premiums on “classes” or “groups” of policyholders instead of individuals.

Verify the financial strength of the long term insurer. That’s important since you will be keeping this policy for many years. You don’t want to be faced with fickle finances later as your insurance company scrambles to raise premiums in order to stay in business.

Trap #3: Not Buying a Tax Qualified Policy

This is very important because you do not want your benefits considered to be income.

You also want to make sure you can deduct some or all of your benefits from your taxes. This is an important detail that can save you a lot of grief later.

Trap #4: Not knowing exactly what your coverage includes

Will your policy care for all of your needs, or just some of them? Do you know which ones, or are they hidden in the fine print?

For example, is it a nursing home only policy or will it cover your in-home care expenses such as daily living aids? Will you be able to stay in your own home because your policy pays people to help you with your meals, bathing, or other needs?

In the next post we’ll look at the last 3 tips to avoiding traps in buying long term health care insurance.