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Is LTC insurance costing so much as to be put out of reach?

Last week we offered perspective on the value of long-term care insurance. The reality is that everyone in Texas is getting older and the expectation of many experts is that extended stays in assisted living or nursing homes are not so much a possibility as a probability for many of us. In that light we noted that many experts agree that having LTC insurance is a wise idea.

There are many reasons someone might not be able to get their hands on an LTC policy, however. If they come to the market late in life, such as when they are on the brink of retirement, many companies become risk averse. As important as including LTC coverage as part of a broad estate planning strategy may be, it doesn't do much good if no one will sell you the product.

Even if you manage to obtain a policy, there is always the chance that you could be faced with extraordinary price hikes that make keeping the policy untenable. This is something that many are reportedly starting to see.

According to the reports, individuals beginning to see their premiums for LTC coverage spike considerably. The explanation insurers give in most instances is that they are playing catch-up with the realities of the market. The changes reflect that clients are living longer and claim costs are winding up costing more than originally thought.

Not surprisingly, this situation has some experts asking how this could have happened. Isn't a foundation of the insurance industry the use of solid data to make reliable predictions of risk down the road?

Unfortunately, as one expert recently told Time.com, insurers botched nearly everything up in this case. They underestimated life expectancies and the length of time care would be needed. At the same time, more people held onto their policies than expected and the companies overestimated the return they'd realize from investments using banked premiums.

The take away for many is that LTC coverage is still a good idea, if it can be found and afforded.

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