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Long Term Health Care Insurance

Health insurance reform has been in limbo for over a year as politicians argue about clauses the people will accept and that the government could afford. One issue that has been avoided to the point of being obvious is that of Long Term Care, the type of care a person receives to simply maintain a quality of life in either their own home, an assisted living facility or a nursing home. The government cannot and will not pay for that beyond the extent that it already does, which is through the Medicaid program.  The best protection is with insurance, but if you want to buy cheap long term health care insurance, you need to do so as young as possible. A few companies will still sell it to people as young as 18.
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Long term care, also called post hospital care, or extended care, is not covered by the health insurance that pays your doctor and hospital. Furthermore, with the arrival of baby boomers on the senior scene, the need for extended care is expected to balloon dramatically in the next 20 years. In recognition of the increasing need, the government passed a bill several years ago, known as the partnership bill, that allows a person to protect his /her assets against Medicaid spend down by purchasing Long Term Care insurance. Numerous states have ratified their own version of this bill.

Those who have explored their purchase options for long term care insurance will have discovered that it can be purchased through their employers (an individual policies but with group prices, not to be confused with long term disability), through private companies such as GE, Physician’s Mutual, CNA, John Hancock, and others, or even through some of the local banks where the most common carriers are often Cigna, American Express Life Assurance Company, AIG, and Blue Cross, Blue Shield. Thanks to our affinity with technology, you can now also find a lot of LTC information online.

Regardless of the source through which you purchase LTCi, a good bit of advice is to purchase it through a carrier that has been in the Long Term Care business for a long time, has a sound financial portfolio, a good reputation for paying claims, and is easy to contact. Making such a purchase through a bank or business that offers LTCi as a sideline may not be your best option.

GE (General Electric Capital Corporation) is one of the largest companies offering LTCi mainly because the company has bought up the long term care blocks of numerous other companies. When long term care insurance first became popular among aging middle class individuals, many companies tried to get a piece of the action by offering competitive premiums and easy underwriting. Until the last couple of decades, the life expectancy of a male was only around age 70. Thus, companies selling long term care insurance were “banking on” the strong possibility that the purchaser would never actually use the policy. In the late 20th century, that assumption began to backfire, leaving companies anxious to get out of their long term care obligations. GE, Conseco, and a few others took advantage of the opportunity to purchase these blocks of business, thus picking up additional premium. In many cases, they also purchased annuity and life insurance business which helped minimize the risk of underpriced long term care obligations.

The most recent GE acquisition is the Amex Life Assurance—based in California. The purchase did not include American Express card related business. Earlier this year, GE purchased Fee For Service, Tampa, Florida, a marketer of low-load life, disability, and annuity products.

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