While most of the aging population cannot put a price on long term care, many understand the need for financial planning that will enable a household to pay for it. Enter: long term care insurance, a product that should have a place in the future of planning for long term care needs.
Yet a full half of the aging population says the insurance is too expensive to be considered.
A Thrivent Financial for Lutherans survey about long-term care planning conducted by Ipsos reveals that 51% of respondents think this kind of insurance is “too expensive,” while another 24% don’t even know what long-term care insurance is.
A quarter of respondents didn’t know about what long-term care insurance covers, and while more than half (52%) have heard about long-term care insurance, they weren’t aware of product specifics.
About 17% of survey respondents aged 55 and older said they currently own a long-term care insurance policy, and the same percentage indicate they plan to buy a policy in the future. However, the remaining 66% of respondents in that age group said they don’t currently own a policy and don’t plan to purchase one.
Younger demographics seem to have a better grasp on the importance of planning ahead for care needs. In both the 18-34 and 35-54 year old age groups, 15% said they currently own a long-term care insurance policy.
More than four in ten of the 18-34 year olds (41%) said that while they don’t currently have a policy, they plan to in the future. One-fourth of the 35-54 year olds said they, too, plan to buy long-term care insurance in the future.
As the boomers head toward retirement and lifespans keep growing, more people are expected to encounter ongoing care needs. About 70% of people aged 65 and older will need long-term care at some point in their lifetimes, according to the Department of Health and Human Services.
“We often hear that cost is an inhibitor to purchasing long-term care insurance,” said Dean Anderson, product leader at Thrivent Financial for Lutherans. “In reality, though, it is often a wise financial decision.”
Written by Alyssa Gerace
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So, just what are the rules and regulations concerning using a reverse mortgage to fund a Long Term Care Insurance Policy
aliasBob,
Here in California not only is HERA applicable but so is state law. The HERA rules only controls HECMs.
In California insurance producers cannot receive compensation if reverse mortgage proceeds are used to purchase any insurance other than homeowner’s and other specifically exempted types of property and casualty.
My advice is to look to your employer for guidance or if a TPO your lenders.
It is hard to believe that we have this as an actual law here in CA. How do they enforce it? Does the customer always tell the Insurance Agent where the funds came from? What is the exact reason that this law was passed?
EricSD,
You have probably read the law itself but if not, here is one webpage where you can find it: http://ca.regstoday.com/law/ins/ca.regstoday.com/laws/ins/calaw-ins_DIVISION1_PART2_CHAPTER1.aspx#785.1
In case you want to read the bill and its preamble go to: http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_0751-0800/ab_793_bill_20110906_chaptered.pdf
It is hard to believe this is the law of the land and that the DOI Commissioner may suspend or revoke the license of a producer for a subsequent violation.
EricSD,
I am no expert on the subject but you can read the preamble to the bill which passed at: http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_0751-0800/ab_793_bill_20110906_chaptered.pdf