The Perfect Storm

long-term care insurance crisis retirement reverse mortgage

The Perfect Storm: Long Term Care premiums skyrocket while fewer qualify

Long-term-care premiums are skyrocketing and many who apply are turned down. Where can older Americans turn to secure their future?

“Right now, if you’re in your mid-50s and healthy, a typical individual long-term care policy would cost around $3,000 a year. Even without premium increases, that would be close to $100,000 over 30 years”. Those are the words of columnist Howard Gold in his September 16th MarketWatch column.

Countless middle-aged workers decided to protect their financial future against costly long-term care in their elder years by purchasing a long-term care insurance policy. A move many financial advisors actively encouraged. Today these policyholders are seeing huge premium increases as payouts for care increased and individuals kept the policies longer than anticipated. Some of the 8 million-plus Americans who have such a policy are facing a financial Sofie’s Choice having to absorb the cost of continued premium hikes or cancel their policies losing the future benefit that years of payments were to secure- all at a significant financial loss. Those wishing to apply for coverage will find getting approved more difficult. “According to the American Association for Long-Term Care Insurance, 44% to 51.5% of people over 70 who apply for a long-term care policy are declined by insurers”, writes Gold. The percentage of those declined coverage drops to about 20% for those in their 50’s. Read More

Wishful Thinking: HECM Costs & Financing LTC

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‘Wishful Thinking’: Lowering HECM Costs & Increased Loan Adoption

reverse mortgage newsIt may be wishful thinking on the part of the Long Term Care Financing Collaborative to think that further reducing HECM costs will increase loan adoption and opportunities to finance long-term care.

Reverse Mortgage Daily Columnist Jason Oliva addressed the assumptions of the Collaborative in his February 24th column which examines the possible role home equity should play when it comes to meeting American’s long-term care needs. Despite the fact that reverse mortgages open a myriad of possibilities for older homeowners by tapping an otherwise illiquid asset, some policy experts feel the existing product may not be adequate to address long-term care costs…

Download a transcript of this episode here.

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