There is a debate on the value of long-term care insurance | I Advance Senior Care Skip to content Skip to navigation

There is a debate on the value of long-term care insurance

January 18, 2018
by I Advance Senior Care
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Long-term care insurance (LTCi) products have endured a rough history, with early policies sold in the 1990s plagued by poor pricing models. That led to instability, with many insurers either fleeing the market, or hitting clients with exorbitant price hikes.

Today, the pricing is more cautious, but nobody knows whether the products are a good match for the ever-expanding life expectancy of baby boomers, according to a story from

“Don’t buy long-term care insurance,” said Melinda Kibler, a wealth manager at Palisades Hudson Financial Group in Ft. Lauderdale, Fla. “Long-term care is a big financial risk, but unfortunately, it’s not one that lends itself to insurance. In fact, LTCi can increase rather than reduce risk in retirement.”

“Thanks to a November 2014 report from AHIP, we know how well savings performs against long-term care insurance – poorly,” said Stephen Forman, senior vice president at Long Term Care Associates in Bellevue, Wash.

Here are three takeaways, from AHIP and Forman:

• To pay for the same amount of services covered by insurance (costing $188 per month), a 60-year-old would have to set aside $1,666 per month for 22 years.
• If an individual invests the value of the average LTCi premium for 22 years, he or she would accumulate only enough to pay for six months of care. By putting the same amount into premiums, he or she could own a policy covering more than three years of care.
• Roughly 22 years of premium payments would be returned after only five months of receiving the average long-term care insurance policy's daily benefit.

Others say that many stock market-oriented money managers by nature, aren’t bullish on long-term care policies, because they could potentially thin out client portfolios, and that’s a negative outcome for money managers.

You can read more on the financial benefits and risks of different types insurance at