Long-Term Care Insurance: A Short Assessment

In my quest to help elders get the care they need and still live at home, another possible solution is long-term care insurance.  Let’s discuss the pros and cons of this approach.

First of all, long-term care insurance has become very expensive.  That’s because many insurance companies suffered losses on policies written in the past and realized they had priced them inaccurately.  A number of companies no longer sell new policies at all (but continue to service their existing policies).

As you would expect, the younger you are when you apply for coverage, the less you’ll have to pay for the policy.  However, the lower premium must be weighed against the amount of time a young person will continue to pay premiums without receiving any benefits.  On the other hand, if you wait too long to apply for coverage, or until you have developed medical issues, you may not be able to qualify for a policy at all, let alone afford the commensurate higher premiums.

You can also reduce the cost of your policy by opting for a longer waiting period, but this means you’ll need to pay medical expenses out-of-pocket until the benefits kick in.  A good rule of thumb is to opt for a 90-day waiting period, or perhaps even longer, which can make premiums more manageable.

Having said all that, I am actually a big fan of long-term care insurance.  If you eventually require long-term care, the policy will pay for itself many times over.  In addition, you’ll have the peace of mind that comes from knowing money will be available to pay for home care (or other forms of care).

Is long-term care insurance right for you?  Given the cost of care today, I highly recommend looking into it.  If the cost falls within your budget, you may want to consider it.  Hopefully, you’ll never need it, but if you do, you’ll come out ahead financially.  As always, I’m here to help you make the best decision.

Until next time, take care….