Q: Many of the long-term care insurance policies I am researching require me to make permanent choices about the policy benefits. Are there any types of policies that allow me to change my policy benefits in the future?
A: Most long-term care insurance policies require permanent decisions about policy benefits upon purchase. This presents a host of potential problems, including insufficient coverage for the future if you choose coverage that is too modest, and the inability to change policy benefits and features if your health deteriorates.
Some policies allow you to make changes after the policy has been purchased—a tremendous benefit if you are interested in obtaining a policy today but are working within a budget. For example, some insurance companies offer flexible policies that allow you to increase your coverage without additional underwriting. That can be advantageous if your health deteriorates, because the insurance company is legally obligated to increase your coverage upon your request.
You should only pay for the additional benefits you add to the policy, while the premium for the initial coverage purchased at the inception of the policy remains unchanged. Before purchasing a policy, be sure to ask your insurance company or agent if the policy has the flexibility to allow you to increase your benefits without additional underwriting after it has been issued.
Aaron Skloff AIF, CFA, MBA, is chief executive officer of Skloff Financial Group, a Registered Investment Advisory firm based in Berkeley Heights, New Jersey. He can be reached at http://www.skloff.com or 908-464-3060.