What does Clark Howard know about Long Term Care anyway?
What does Clark Howard know about Long Term Care anyway?
As a consumer advocate, Clark Howard offers a lot of great advice on many subjects, such how to save money and how to avoid getting ripped off. When it comes to giving advice on insurance options…..well, and I hate to admit it, but you need to remember that Clark Howard’s background is that he is a travel agent, and not an insurance agent.
He does in fact advise people to look into Long Term Care insurance, which is a good thing, but some of his approaches and recommendations are a bit flawed, or at best misleading. If you go to his web page, you will note that he has a LTC “honor roll” of carriers. He also lists some carriers that we would give “honorable mention” to.
Here is what Clark Howard states on his web page about LTCi:
1) You only want to consider companies that have been rated “A++” (by A.M. Best), which means they are of the highest financial strength. It also means that they won’t jack up the rates after a few years and they will cover you for either in-home care or nursing home care.
2) The prime age to buy is late 50s to early 60s. So if you have aging parents, talk to them about it.
3) You should not buy LTC insurance if you are very wealthy or don’t have a lot of assets.
The problem with the first recommendation is that AM Best is not the sole reason you should consider a carrier, but an A+ or A++ rating is of course desireable, and you do not want to buy a B- company. Of the names on the list, most are fine, but he suggests, for example, USAA. USAA does not sell LTC insurance (LTCi), they sell John Hancock LTCi, who is also on the list. The Hartford is on his list, but Hartford (unless I missed something along the way) does not sell LTC insurance…never did. Ameriprise is on his list, but they do not sell LTCi either, as they are contractually obligated to sell Genworth LTCi. What I find the strangest of all is that Genworth is only given honorable mention. Genworth is the 900 pound Gorilla in the LTC market. Great plans, great rates, more policy holders and claims paid than any carrier out there. Go figure. There are many fine carriers out there, and you need to work with an experienced agent to help you find the best fit for your situation. All comprehensive LTC plans by the way cover in home, assisted living and nursing home…..regardless of AM Best ratings. Health issues or special requirements will determine which quality carrier to go with. Some of the carriers he suggests are terribly overpriced compared to the rest of the field, and I would never recommend you look at some of them.
The second recommendation on the age to buy LTCi was addressed in a separate blog, but there are definite advantages to starting earlier than he suggests. Early to mid 50’s is better than early 60’s.
The third recommendation is subjective, but ok in priciple. Many people who are wealthy still buy LTC because they believe that spending a little bit of money now to avoid a major expense later is a good thing…..even if they can afford the costs of LTC. Maybe decisions like that is why they got to be wealthy in the first place. People who may not have a lot of assets may not be able to afford to get a LTC plan….and Medicaid will possibly help them live in an overcrowded, understaffed facility some day. Maybe the children of those people would care enough about their parents to help them with the premiums if at all possible to make sure they got the best possible care one day should a LTC need ever arise.
Anyway, Clark has great deals on cheap airfare, but look to an experienced LTC agent for help protecting your future.
Herman Bruns
