Long term care annuities - a new concept

Most of the times, people do not opt for a long term care insurance policy because they feel it is an extra precaution that financial consultants try and force on to them. In a certain percentage of cases, this actually proves true since not all those who invest in long term care insurance actually end up needing it or availing it.

Even though a large number of people are now choosing to go for long term care insurance, there are still many who do not choose one because they feel that they can manage the long term care that they may require based on their savings. This is definitely a myth since the cost of long term care is extremely high these days. The average cost of a nursing home is about $100,000 per person per year and this can deplete an average saving of a lifetime in a few years or less. In the case that you are looking for nursing home services for a couple, the depletion of assets will be faster.

Some feel that the long term care insurance premiums that are required are too high. And indeed, the premiums for long term care are higher than those of term life insurance, whole life insurance and health insurance. You can assess this by comparing a life insurance quote with a long term care insurance quote and you will realize the difference immediately. Make sure that you do not compare a term life insurance quote with a long term care insurance quote since the two are not comparable and meant for different purposes.

A life insurance policy like term life insurance and whole life insurance is not designed to provide an annuity that can suffice and cover the long term care expenditure that you might incur. Even the highest life insurance rates cannot provide an annuity or a life insurance settlement that will take care of nursing home costs or home care.

Life insurance agents who sell annuities may not disclose that there is a huge disadvantage with long term care insurance policies. The disadvantage is that if you never grow old enough to actually require long term care, and do not qualify for long term care based on the specific details of the long term care insurance policy, the long term care insurance premiums that you may have paid are worthless. The agents may focus on the selling annuity and conveniently forget to mention this great new product that has been developed for those who need long term care but feel that they do not want to put large amounts of premium aside for an eventuality that may not arise. This is especially true if the life insurance company that they work for does not provide an option for this new product called long term care annuity.

If your financial consultant has kept abreast with the latest developments in the long term care arena, he will be able to explain the concept of a long term care annuity to you. A long term care annuity is the latest investment tool that has been developed keeping the reservations of the consumers in mind.

The concept works by placing a large amount in the long term care annuity fund. This wealth would attract a rate of interest in line with the market and would probably become 1.5 times the amount in ten years. Converted into an annuity, it would mean a certain amount of money per month.

The unique aspect of long term care annuity is that even though the annuity is termed as long term care annuity, you do not need to qualify to avail of the annuity as you have indicated in the long term care annuity documentation. You may need to reduce your daily activities and may need to plan on exactly what nursing and home care services you may require. These could include bathing, cleaning, continence, dressing and the like.

The reason why this concept of long term annuities has been acquiring popularity is that it is extremely customer focused. While it allows individuals to plan for a possible situation where they may need long term care, it does not necessarily require you to qualify to receive the nursing service or long term care. It is, in fact, similar to a large investment that you make that can give you high returns.