Should I Buy Long-Term Care Insurance?

Article Source: Max Gottlieb is the content manager of Senior Planning in Phoenix, Arizona. Senior Planning gives free assistance to seniors and their families, helping them navigate the often-complicated processes of senior care in Arizona.

Although Obamacare has insured and lowered costs for some, there are still groups who are becoming increasingly more vulnerable to the costs of care. With baby boomers coming into old age in a vastly different environment than previous generations, they are going to need to start planning now. When it comes to paying for care outside of simple doctor visits, many older adults are on fixed incomes and therefore don’t have as much flexibility as a younger, fully employed individual. With long-term care, the cost of care oftentimes exceeds many people’s salaries or dramatically decreases a person’s standard of living. According to the Wall Street Journal, 33% of people 65 and older will need long-term care at some point in their lives. One of the main questions we get on a daily basis is, “how do I pay for long-term care without depleting all my savings?” Sometimes the answer is long-term care insurance. Many people want to leave a legacy or estate behind for their children and long-term care insurance can help a person pay for the costs of nursing and in-home care. The cost of long-term care at a facility can be well over $3,000 a month while in-home care can climb up to $250 a day; a serious hardship for most middle class families.

MetLife insurance reported that the average cost of a private room in a nursing home was $81,030/year in 2012 and 24-hour assistance of in-home care costs even more. This is why it is important for many adults to start thinking about long-term care beginning in their 50s, when they are still able to get a reasonable premium as well as higher payouts. If you are able to buy the insurance before anything happens to your health such as Alzheimer’s or a fall, the premium is greatly reduced and there is less of a chance of being denied. If you are able to plan 25-30 years in advance, it can help you in the long run when it comes to being able to afford long-term care. A healthy 55 year old can find a reasonable policy that provides adequate daily benefits in the event they need care.

These policies help those people who cannot self-insure and who also do not qualify for Medicaid. Many people simply do not think about future long-term care, but these are the people who are hit hardest by medical costs later in life. Other people rely on government programs such as Medicaid or Medicare. However, many people do not know that Medicare does not cover long-term care. To qualify for Medicaid long-term care, most states have an asset limit of $2,000. Many states, however, offer a long-term care partnership, which means that for every dollar you spend on long-term care insurance, an equal amount of assets will be saved in the event you need long-term care and the insurance coverage runs out. A long-term care policy can bridge the gap and provide more options. This is especially beneficial for those wishing to pass assets on to their loved ones. Another situation where long-term care insurance is useful is where a spouse is still working and long-term care is needed earlier than planned. Medicaid has an income cap so a working spouse can disqualify the medically needy spouse.

As you age, long-term care insurers will be less likely to give you a policy because of pre-existing health conditions. Also, if you are in poor health at a young age, you will unfortunately have a hard time finding a long-term care insurer that will help you. If they do, most likely, you will have to pay higher premiums, which is why it is important to start looking for policies when you are healthy and active. Don’t assume that there aren’t options for you. It’s a good idea to call and ask an agent what options are available because long-term care insurance is a valuable asset for any older adult.

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