subject: Over 50? Consider Low-cost Long-term Care Insurance [print this page] What is Long-term care insurance? What is Long-term care insurance?
Long-term care insurance is insurance for large costs that could be incurred in old age, such as medical care, nursing care and all other forms of assistance you would need if you ever have a chronic illness or disability that leaves you unable to care for yourself for an extended period of time.
Long-term care can be received in a nursing home, assisted-living facility, or in your own home. Though older people use the most long-term care services, a young or middle-aged person who has been in an accident or has an incapacitating illness (like paralysis) may also need long-term care.
The debate behind Long-term Care Insurance:
Some people wonder if long-term care insurance (or LTCI) is worth buying at all. A large percentage of people who choose to buy long-term care do so because they saw a parent struggle with long-term care needs that were provided for by an LTCI payout. Others are appalled at how people they know were treated by insurance companies and denied claims because one condition or the other didn"t make the cut when it came to collecting LTCI benefits. Others say that rising prices of long-term care have not been helping those who need it most either, with the average new policy costing 25% to 30% more than it used to 5 years earlier1.
Regardless of what side of the argument you"re on, the need for long-term care planning is rife. Without any coverage whatsoever, you would have to eat into your savings until you reach rock bottom and then become solely reliant on Medicaid. A suggested alternative would be to invest your own money and hope that it would provide for your LTC needs when the time came. At a steady growth rate of 5%, this still doesn"t quite cut it, factoring in inflation and rising costs of care. You could be broke at the age of 80 with nothing of your nest egg left and many regrets for rest of your life because of the lack of financial planning. While it is OK to fall back on the help of family members as a last resort, don"t forget that it requires great emotional and financial sacrifices on their behalf as well.
What makes long-term care insurance truly versatile is the fact that you can use the money however you wish, as long as it is for your own care. For instance, choosing help at home in the initial stages of a debilitating sickness may be alright. But as the sickness progresses, you may need full time care in an assisted living facility. This freedom and flexibility offers peace of mind to both you as well as your family or appointed caregivers when the time comes.
You can access affordable and even low cost LTCI though if you are over 50 years of age. Try looking up some quotes online on an aggregator website like AccQuote.com to see what you qualify for.
Some pointers to help you buy LTCI:
Make sure to buy from a carrier that has never been served with a class action lawsuit. Buy from a clean A- rated company that honors legitimate claims and won"t mess around with you when it"s time for you to collect as well.
Get basic coverage when in doubt. In fact, some people advocate basic coverage even if it may not be the best or most comprehensive one available2. This is because the "best" policy is the most expensive, and not everyone can afford to pay their expensive premiums. It can also be the perfect supplement to a nest egg you may have saved for retirement which buys you time on both fronts.
Understand how time works when you buy LTCI early on. This may mean more years of paying into a policy but lets you have a larger payout. Don"t buy policies with large elimination periods, putting you at risk of non-collection should something happen to you while waiting for this period to get over.
Ask your agent to explain your policy to you. LTCI is notoriously known for being unnecessarily complicated, putting many people off from purchasing it.
When LTCI is not for you:
If you cannot afford to pay costly LTCI premiums, do not qualify for average to decent rates because of your health or don"t see any need at all for long-term care, this insurance type is not for you. You are better off arranging for nursing home expenses in your own ways, either through annuities, money market funds or other forms of savings plans. You can also consider adding an LTC rider on your whole life insurancepolicy which lets you use the death benefit for long-term care needs.
Don"t delay in getting some form of coverage for your long-term needs. Plan today to save yourself the frustration and monetary loss that comes with long-term care.
by: Pat Cassidy
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