Is a Long-Term Care Policy Right For You?

Long-term care insurance is probably not for everyone, but—with soaring healthcare costs, insurers increasingly restricting coverage and eligibility, and people’s need to stretch retirement savings through more years—it’s a good idea to consider it seriously. Your goals should be to protect your assets, minimize your dependence on other family members, and control where and how you receive long-term care services.

On the other hand, consider the cost. Long-term care insurance is expensive. An individual who’s 65 years old and in good health can expect to pay between $2,000 and $3,000 a year for a policy that covers nursing home care and home care, with premiums adjusted for inflation. You may not want to buy a policy if the cost of premiums will lower your standard of living or force you to give up other things you need right now. And look ahead, as well. Be sure you’ll be able to afford the premiums if your income declines.

Key Issues to Review – Be sure you consider each of these issues:
-Coverage. You can choose long-term care policies that pay only for nursing home care, or only for home care. Or, you can opt to purchase coverage for a mixture of care options that includes nursing home, assisted living, and adult day care. Some will pay for a family member or friend to care of you in your home.

-Daily or Monthly Benefit. The daily or monthly benefit is the amount of money the insurance company will pay for each day or month you are covered by a long-term care policy. If the cost of care is more than your daily or monthly benefit, you will need to pay the balance out of your own pocket.   

-Benefit Period. Your benefit period determines the length of time you will receive benefits from your policy. You can choose a benefit period that spans from two to six years, or the rest of your life.

-Elimination or Waiting Period. During this period, you must pay all of your long-term care expenses out of your own pocket. This period could last anywhere from 0 to 100 days. The longer the waiting period is, the lower your premiums will be.

-Inflation Protection. With health care costs rising to new heights every year, buying a policy without inflation protection is probably like buying a policy that won’t cover much of your expenses. There are two main kinds of inflation protection: the right to add coverage at a later date; and automatic coverage increases.

For more information on Long-Term Care, Please contact our office today!