Long-Term Care Insurance: First, You Should Find an Agent


I’m thinking about buying long-term-care insurance. Can you recommend a particular insurer or type of policy?

Actually, your best first step is not to shop for a carrier or policy. Rather, it’s to shop for a knowledgeable, independent agent.

Before we get to the particulars, let me pause and emphasize how important this topic is. One of the biggest financial mistakes that older Americans make is failing to plan for long-term care: what type of help they might need, how long they might need it, and how they’re going to pay for it.

I have spoken with many retirees through the years who simply are in denial (“I won’t need long-term care”) or are playing a waiting game (“I’ll deal with it when the time comes”). Both attitudes can put you and your savings at risk.

The Department of Health and Human Services, in 2016, estimated that about half of people (52%) who reach age 65 will require some type of long-term care and incur, on average, $138,000 in costs. In 2017, PricewaterhouseCoopers, after examining claims submitted to eight major insurers, put the figure at $172,000.

So, I applaud that you’re thinking about this. But please: Take a step back. Long-term-care insurance, as you’re probably aware, is a ridiculously complicated product, one that comes in many shapes and sizes. As such, an independent agent—one who sells policies from multiple carriers and who specializes in long-term-care planning and insurance—can help you navigate these waters.

How to find such a person? First, there are several educational and training programs for insurance agents and other financial professionals that focus on long-term-care insurance. One of them, Certification for Long-Term Care, has a locator on its website that identifies its graduates across the country.

Cost of Care

The median monthly costs, nationwide, in 2020 for:

Assisted-living facility†

Nursing home, semiprivate room

Nursing home, private room

Second, search online for experts in or near your locale. (Example: long-term-care insurance specialist in your town or city.) And third, ask other professionals—financial planners, accountants, tax lawyers, estate planners—if they have worked with a long-term-care specialist.

Ideally, this exercise will generate several names. The next step—one that, admittedly, will take some time and effort on your part—is sitting down with these individuals and talking about their education and background. Here, what you don’t want, says Bill Comfort, a long-term-care insurance specialist in Durham, N.C., is someone who jumps immediately into policy features and premiums. Rather, you’re looking for an adviser who, first, takes time to understand your situation and needs and, second, can explain how various types of coverage might help.

Of course, you also will want to gauge how much of a “specialist” each candidate actually is. This means, Mr. Comfort says, asking about, among other issues, their experience (How many years have they sold LTC insurance? How many policies a year?); the number of carriers they represent (“captive” or “career” agents typically represent just one insurer); and their ability and/or willingness to sell different types of policies, including both traditional LTC insurance and “hybrid” policies, which combine LTC benefits with, say, life insurance or an annuity. (See a comprehensive list of questions on Mr. Comfort’s website.)

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Have a question about planning for and living in retirement? Email askencore@wsj.com.

And…see if the agent, at some point, gives you (or directs you toward) a copy of “A Shopper’s Guide to Long-Term Care Insurance.” This 71-page booklet, published by the National Association of Insurance Commissioners, is a terrific resource. More to the point, the introduction reads: “Most states’ laws require insurance companies or agents to give you this Shopper’s Guide to help you better understand long-term care insurance and decide which, if any, policy to buy.”

Yes, you can find this guide yourself on the association’s website. (But an agent who takes pains to share this with you when you first meet could be a keeper.

My birthday was Dec. 31. I turn 72 on Dec. 31, 2023, a Sunday. Does the fact that my birthday is on the final day of the year—and on a Sunday, at that—affect when I have to take my first required minimum distribution from my IRA? Put another way: Can I take my first required distribution before Dec. 31, or do I have to wait until 2024?

This question allows me, first, to remind readers that “RMDs” are back on the table. The Cares Act, which was signed into law in March 2020, waived the requirement in 2020 for those age 72 and older to withdraw some money from retirement accounts. But that turned out to be a one-time event; the pandemic-relief legislation that took effect in late December didn’t extend the waiver. So, you can begin planning your withdrawal for 2021

Share Your Thoughts

What has your experience been with long-term-care insurance? Join the conversation below.

As for this question…birthdays that fall on Dec. 31—or Jan. 1, for that matter—receive no special treatment, says

Ed Slott,

an IRA expert in Rockville Centre, N.Y. That’s true even if either day is a Sunday or holiday. Put another way, there is no “next business day” deferral as there is with some other tax deadlines. (For example, if April 15 falls on a weekend or holiday, then the due date for tax filing is the next business day.)

If you turn 72 on Dec. 31, 2023, then 2023 is your first “distribution year”—the first year for which an RMD is due. You would have until April 1, 2024, (your “required beginning date”) to make your first withdrawal. If you wait past the end of 2023, you would have to make two withdrawals in 2024: one withdrawal for 2023 and one for 2024. Again, all this holds true even though your birthday in 2023 happens to fall on a Sunday.

If you were to turn 72 just one day later—on Jan. 1, 2024—your first RMD year would be 2024, and your required beginning date would be April 1, 2025.

A final note: Even though you will turn 72 on the final day of 2023, you can take your first RMD at any time during that year, Mr. Slott says. In fact, any withdrawal you take in 2023—in the eyes of the Internal Revenue Service—will go toward satisfying your RMD, even if the withdrawal is made before you actually turn 72.

Mr. Ruffenach is a former reporter and editor for The Wall Street Journal. The Ask Encore column examines financial issues for those thinking about, planning and living their retirement. Send questions and comments to askencore@wsj.com.

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