Rules for choosing the right non-self-sufficiency policy

I am a 54-year-old employed person and am considering taking out a Ltc policy given that, at this age, premiums are still affordable. Given that I have already discarded policies that envisage the payment of 'whole life' premiums in preference to those with temporary premium payments (10/15/20 years) and 'whole life' cover, I have listed the peculiarities that the policy should have in the following order of importance: 1) criteria for the definition of 'non self-sufficiency'; 2) the presence of indexation or revaluation of the premium, of the benefit and of the annuity, if any; 3) the possibility and the procedures for taking advantage of the so-called 'reduction'; 4) the amount of the premium. What do you think?

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Answer by Federica Pezzatti

As people live longer, the number of disabling chronic illnesses increases, and with them the need for support for dependent care. This is what ad hoc insurance policies are for. The issue will be increasingly central in the future given the trends: given the demographic freeze, the family network will struggle to support the senior population in the future. In this context, Ltc (long term care) insurance cover, also known as non-self-sufficiency insurance, constitutes a fundamental form of family (and therefore not only personal) protection, and interest in this product represents an index of economic and civic sensitivity, especially in view of the lack of advertising and promotion of it in Italy, where these policies are still not very widespread. The intention to buy the product before old age makes it economically 'unaffordable' is equally shareable, both because of the very high amounts of annual premiums required already from the age of 55-60 onwards, and because of the very restrictive 'underwriting conditions' regarding the health of the potential insured. "As far as the contractual form is concerned, the payment of a 'temporary' premium certainly allows better planning,' explains Claudio Raimondi, an actuary expert in the field and managing director of For Care. 'It is equally true that being able to spread it over a longer horizon (up to whole life) allows a lower relative burden, and in any case, in the event of a claim, the interruption of the premium payment is substantially guaranteed by each company,' continues Raimondi, who helped us to answer the reader's questions. With regard to the form of annuity, precisely because of the peculiarity of the insured event, the whole-life form is obviously to be preferred'. Responding to his questions by points: 1) from a purely mathematical and probabilistic point of view, it would indeed be preferable to have a policy that provides an annuity benefit on the recognition of four out of six ADLs (activities of daily living), or 45 out of 75 (in the scoring formulations).

"However, it is worth sharing a reflection that has been made several times with different companies," explains Raimodi. The LDAs are all factually related to each other. Recognition by the assessor cannot be analytical/objective, not even by introducing centesimal tables. It would be better, therefore, rather than dwelling only on the mathematical aspect, to consider more qualitative aspects set out in the insurance conditions (Cda), such as, for example, 'the form of assessment' (pausing to check by whom it is carried out), or the inclusion in the cover of neurodegenerative pathologies, which may translate into real states of non-self-sufficiency despite not even providing for an impaired Adl (this is the case of Alzheimer's).