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Consumer Reports Pans Long-Term Care Insurance

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The November 2003 issue of Consumer Reports magazine offers a fairly negative assessment of long-term care insurance. For most people, the publication contends, "long-term-care insurance is too risky and too expensive."

Consumer Reports sees the following problems with such coverage: 1) You must continue paying to keep a policy in force. If premiums rise, you may have to drop the coverage, possibly losing everything that you've paid; 2) The policy's benefits may cover only a portion of your total long-term care expenses; 3) Many policies are packed with catches that can keep you from collecting; and 4) There's no guarantee that long-term-care insurers will be around decades hence when you need them to pay.

Although it calls long-term-care insurance "a lousy deal," Consumer Reports says that "right now it's just about the only deal." The magazine offers tips on deciding whether a long-term-care policy is right for you. In evaluating 47 policies, the editors found only three to be acceptable.

The magazine suggests waiting until age 65 to buy coverage unless you have a chronic disease, noting that the average age of people admitted to a nursing home is 83.

Long-term care insurance expert Phyllis Shelton, author of Long-Term Care: Your Financial Planning Guide, offers a detailed response to the Consumer Report article on her Web site. Shelton charges that Consumers Union's agenda is to have a national long-term care program, and so it is critical of private long-term care insurance. Shelton addresses what she calls Consumer Reports' many mistakes and misrepresentations in the article. For example, regarding the magazine's advice to wait until age 65 to buy coverage unless you have a chronic disease, she points out that "People with chronic conditions likely will not qualify [for insurance], even at younger ages. In addition, this advice completely ignores the potential for accidents and strokes."

For Shelton's full rebuttal, go to: http://www.ltcconsultants.com/general/articles/10-06-03.shtml

For the 2008 version of Consumer Reports online article on long-term care insurance, click here.