Should I Get Long-Term Care Insurance?

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Long-term care insurance can support your health and your savings.

Everyone ages.

Each year, you take another trip around the sun.

You may be perfectly healthy now.

Even so, your body (and mind) will wear down.

You can make bank on that fact of life.

According to a recent Forbes article titled “Is Long-Term Care Insurance Right For You?,” declining health brings an attending increase in medical expenses.

One of the biggest medical expenses could be for your long-term care.

Long-term care insurance is worth the expense.
Long-term care insurance is a wise investment for your future.

Often long-term care insurance (LTCi) is recommended to help with such expenses.

The problem?

Long-term care insurance is itself an expense.

Is a long-term care insurance policy worth it?

In my opinion as an estate planning attorney for nearly 30 years?

Yes.

Consider the current median annual cost for a private nursing home room.

It is more than $92,000.

Yikes!

The annual median cost for assisted living is still pretty steep at $43,539.

These numbers a pretty significant and continue to trend upward.

Although you may not need long-term care in the future, it is wise to prepare for the possibility.

Why?

Medicare and other types of health insurance do not cover most long-term care.

In short, care in the form of help with daily activities such as bathing, eating, dressing, moving, and using the bathroom are not included.

Most insurance providers and Medicare pay for only services considered medically necessary, like rehab from hip surgery.

Medicaid provides long-term care coverage for those who meet the “need” requirements and have limited financial resources.

And the rules governing Medicaid eligibility are very strict to keep folks from “gaming” the taxpayer-funded program.

If you will not qualify for Medicaid, long-term care insurance is a wise investment.

Gretchen and I have had our own LTCi policies for more than a decade.

Research your policy options.

These should include skilled nursing, assisted living, and custodial care.

Check to make sure Alzheimer’s and dementia are covered.

Look at limitations on persisting conditions, at maximum payouts, at lag time until benefits begin, at whether payments are adjusted for inflation, and at how long benefits will last.

You should also know whether there is a waiver of premium benefit benefits when you are collecting long-terms care benefits or whether there is a non-forfeiture benefit.

Evaluate how many times premium rates have increased in the past decade.

If you purchase your policy through an employer, you should check to confirm whether the policy is portable.

When should you purchase a policy?

The best time is between ages 50 and 65.

Why?

The most cost-effective time is when you are in good health.

How so?

Premiums are lower if you are younger.

It is possible you could be denied if you wait until you are older and in poor health.

If you are in the ideal age range, research and purchase the best policy for you.

Reference: Forbes (April 17, 2020) “Is Long-Term Care Insurance Right For You?”