Things to consider:
- First, LTC insurance provides married couples with benefit options not available to single individuals, such as couple’s discounts of as much as 20% off each person’s premium.
- LTC policies are issued to each person individually along with individual premiums, including any discounts that apply. Of significance here is that, following a divorce, each now divorced spouse already has and can keep his or her own policy. Also, the couples’ discounts that were applicable at time of policy issue will remain in effect as long as the LTC premiums continue to be paid. In sum, the LTC insurance plans continue with whatever benefits and discounts were issued prior to finalizing the divorce.
- Optimally, it is most advantageous for couples to purchase coverage from the same carrier. To facilitate some of the problems divorcing couples face, the data gathering and meetings can be done with each individual separately. Each individual can select a plan that meets his or her individual goals and budget. The benefits selected by each individual can be entirely different from those selected by the spouse, and the couples discounts will still apply.
- Should an applicant’s health history make some insurers unwilling to offer coverage, the LTC insurance specialist can still shop the case with different insurers. Most companies offer “marital discounts,” so that if only one person of the couple applies, the typical marital discounts of about 10% still apply. Marital discounts will also continue as long as the policy remains in force, and after a divorce is finalized. So here too, significant discounts are available.
Since couples and marital discounts are available prior to a divorce being finalized, clients and their attorneys have the opportunity during the divorce process to arrange for LTC planning. This will provide for the emotional, physical and financial needs of clients and their loved ones should a need for LTC arise. In addition, this will help them benefit from the significant discounts that continue after divorce is finalized and for as long as the policy remains in force.
In short, LTC is a family affair. Divorces are typically and extremely difficult time in the life of the family. However, with forethought and planning, despite all the misfortunes, putting a LTC plan into effect before finalizing a divorce will help protect children, families and loved ones from the emotional, physical and financial impact should a LTC need arise. Doing such planning should be carefully considered.
Vivian P. Gallo, CLU, CSA, AEP, CLTC, is founder and LTC insurance specialist of Choices For Long Term Care Insurance, an independent broker and LTC planning specialty in Hartsdale, N.Y. Her e-mail address is [email protected].