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Estate and Elder Law

Model Worksheet for Deciding Whether to Purchase Long-Term Care Insurance

            This form, prepared by the National Association of Insurance Commissioners, is intended for someone who is either in the market to buy long-term care insurance or an adult family member of such a person. It presumes that the “shopper” has spoken with at least one insurance broker already and received a quote, along with other relevant information about the policy in question. The worksheet is a tool to analyze that policy as well as the buyer’s needs should s/he make a claim in the future.
            Long-term care insurance has become a common part of the estate plans of millions of Americans – typically those with a net worth of between $200,000 and $5 million. Because of the high annual cost of such insurance premiums, those worth less than $200K will typically rely on Medicaid should they require long-term care in a nursing or similar facility, while people worth more than $5 million can simply pay their own way.
            Of course, that leaves a lot of other Americans who are confused, even overwhelmed, by the many issues that one must consider before deciding on the best policy for him or her. These include –
  • How reliable is the insurance company? How is it rated by S&P? Moody’s?
  • Age of the applicant (the younger the applicant, the less expensive the premiums, but the longer the payments)
  • Applicant’s current health and life expectancy
  • Family Longevity: The ages of the applicants’ parents and siblings (whether living or dead)
  • Financial Resources: Once retired, will the applicant be able to afford the premiums?
  • Waiting Period: Typically there is a waiting period (30-, 60- 90-days) before coverage commences. The longer the waiting period, the less expensive the premiums, since the insurer is hoping the client will make a quick recovery that doesn’t warrant custodial care.
  • Length of Coverage: This one is toughest of all, since none of us has a crystal ball: How many years of coverage will the client need?
  • Inflation Escalator: Remember that the cost of nursing care, like just about everything else in America, rises over time. Hence, should the client, once covered by the policy, pay for extra coverage each year to cover the increase in cost of a nursing home due to inflation?
            These are just some of the issues to consider in choosing the best policy. This form is designed for estate planners, elder law attorneys, financial advisors and CPA’s to assist their clients in selecting the right coverage. The form should be completed after the client has obtained at least two (ideally, three) quotes from different insurance companies. You and the client should complete it together in your office, giving you the opportunity to answer any questions s/he may have or to explain terms like the “inflation escalator”.


This form can be found in Matthew Bender’s Long-Term Care Advocacy. Those interested in learning more about this book can visit the Lexis Bookstore by clicking here.
For those of you who are subscribers to, you can access Long-Term Care Advocacy by clicking here.