18 Apr

Long-Term Care Insurance – May Be Your Best Investment Yet

April 18, 2008

It’s not going to happen to me.

Medicare or my health insurance will take care of it.

My children will look after me.

America as a nation is aging rapidly and many people avoid thinking about the day when they or a loved one will need long-term care services and therefore fail to plan.  Long-term care refers to the many services beyond medical care and nursing care used by people who have disabilities or long-lasting illnesses.  Long-term care insurance helps pay for these services, which can be very expensive, thus protecting the assets you’ve accumulated during your lifetime.

The U.S. Department of Health and Human Services estimates that about 40% of people ages 65 and older have at least a 50% lifetime risk of entering a nursing home.  At a time when the average cost of a private room at a nursing home tops $74,000 a year, long-term care insurance can be a solid investment for individuals who have assets they want to protect or who want to avoid becoming a financial burden to their family.  Unlike other types of insurance, long-term care policies are complex and vary widely.  Virtually every company’s policy differs on such matters as who qualifies for coverage, when the policyholder can begin receiving benefits, the amount of coverage, the term of the policy, and premium costs.

Long-term care insurance typically covers the cost of:

  1. Help in your home with daily activities like bathing, dressing, eating, and cleaning.
  2. Community programs such as adult day care.
  3. Assisted living services that are provided in a special residential setting other than your own home.  These services may include meals, health monitoring, and help with daily activities.
  4. Visiting nurses.
  5. Care in a nursing home.

The best time to buy long-term care insurance may be middle-age (age 50-62).  It’s the time when you have the highest likelihood of being eligible for a policy and just as important, when premium costs are lower.

Long-term care insurance is probably not for everyone, but with soaring health care 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.

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