Long-Term Care Insurance is Different than Investments

You would have to be living in a cave not to know that a number of financial institutions that were the giants of the industry are in the state of collapse. As a result, many are questioning whether long-term care insurance is worth the paper on which it is printed. It is understandable that one look at this financial mess with a jaded eye.

Let me explain that even though investments and long-term care insurance may both be part of a financial plan, they offer different benefits and risks.
Stocks and bonds are issued by a corporation and their value depends on the financial health of the company.

A long-term care insurance policy is absolutely a different animal. Insurance is regulated by each state and the regulators require that insurance companies put aside money (called "reserves") to help make sure that future claims can be paid. In addition, regulators restrict how these reserves can be invested,

It is important that policyholders understand that their insurance contract is backed by more than just the promise and goodwill of an insurer. There is actually money put aside to make sure claims can be paid.

As in the case of AIG, the policyholders are safe. Even in the worst case scenario where an insurer becomes insolvent or is unable to pay its claims, here comes the state's guaranty fund. Insurance contracts are regulated by the Division of Insurance (DOI) in the state where the contract was originated.

Insurance offers guarantees backed up by reserve funds and guaranty funds. You do not get this with your financial investments.

In a world of increasing uncertainly in so many areas, it's a another reason to make sure a long-term care insurance policy is part of your financial plan.

I can answer any questions or discuss your particular situation. You can contact me at 949-854-3001 or email dane@LongTermCareInsurancePros.com