Making a sound LTC carrier recommendation in today’s topsy-turvy market is simple if you stick to three fundamental criteria. In order of importance, beginning with the most important, they are – ratings, access to benefits and price.
This is simple. Assuming other considerations are equal, pick the highest rated carrier. Financial strength matters over the long haul.
There is nothing more important than giving your clients the best chance possible their carrier will be there, in good shape — to deliver on the promise. Remember, it’s a long time horizon before your clients may claim.
While length of time (experience) in the LTCi market is important, it can also be a double edged sword in some instances. Old blocks were not priced adequately and the complete story has yet to be written. Later entrants may be better positioned for the long haul.
Benefit Access – Today and In the Future
Benefit Flexibility is essential. New services and care providers will emerge in the future – same as the past – that today’s “definition based” contracts may not cover. When comparing two products, the one with more flexible benefit access is the one that will perform best when needed most – ten, twenty or thirty years from now.
More contemporary products include “cash” benefits as an alternative to traditional “definition based” reimbursement benefits. Cash benefits can be paid without regard to policy definitions so long as the benefit triggers are met. Even today, without any doubt, they can pay benefits when purely “definition based” plans can’t. The gap will only widen as time goes by. Again, all other things being equal, give your clients the best chance to get to their pool of money when they need it.
Price is obviously important but value is a much better measure.
When comparing two policies ask yourself some value related questions. Is it an apples to apples comparison? Which company will most likely be around twenty or thirty years from now? Which plan is more adaptable to the rapidly changing world we live in and thus more likely to pay benefits? Are the rates you are looking at in step or out of step with the market?
Only when all other things are equal (rating and benefit access), is it advisable to pick the lowest price.