As we begin thinking about our future selves, many people ask, “Is long-term care insurance worth it?” It seems like there is an insurance plan for just about everything these days: our homes and cars, our health and the many facets that entail, our travel plans, and even our pets.
How much is enough insurance? How much is too much? Unfortunately, that’s only something you can decide! But, as your Local Medicare Specialists, we’re here to help guide you through that decision-making process. Today, we’re going to take a look at a few reasons you may want to purchase (or not want to purchase) long-term care health insurance.
Before we answer that question, let’s define what long-term care is. Long-term care can be a variety of things, but it can be simply described as a set of services or facilities that offer long-term care services for people with chronic illnesses, disabilities, and people who just need more help due to the aging process. In-home help, nursing homes, and assisted living facilities are all examples of long-term care options. And yes, all of them can be quite expensive.
Insurance for long-term care helps pay for some or all of the costs associated with these services. When you apply for insurance, you’ll decide on a daily or monthly maximum about the plan will pay. Then, when your physician states that you need help with at least two activities of daily living (ADLs), you are eligible to be reimbursed for up to whatever limit you chose. Most of the time, a long-term care insurance plan will have an elimination period (similar to a waiting period) that you much get through before the plan begins to pay. During your elimination period, you’ll be responsible for all costs.
Let’s run through three reasons you should purchase long-term care insurance.
Asset Protection. We know long-term care is extremely expensive. Without insurance, you may need to dip into your savings, investments, and other retirement funds. While this is part of what those resources are for, they may get depleted faster and cause you to run through them.
Independence. Whether we want to admit it or not, money provides options. Having long-term care insurance gives you more money to choose from a variety of care options. It’ll be up to you to select the facility, your doctors, and even if you want to continue your care at home. Long-term care insurance preserves your independence and control over your life.
Relieving Family Burden. If your finances don’t allow, you may need to rely on family members to help provide some of your care. This can be physically, emotionally, and financially stressful for them. Having insurance allows you to afford professional care, leaving your family free to enjoy their time with you.
Long-term care insurance isn’t right for everyone. Now, let’s take a look at the three reasons you should not buy long-term care insurance.
High Premiums. Long-term care is expensive, and so is long-term care insurance, particularly if you don’t purchase it until your later years or have existing health conditions. The premiums may take up a significant part of your budget, which is often a strain on those with fixed budgets.
Limited Payouts. Long-term care insurance has limitations. We already mentioned that you’ll have a daily or monthly maximum amount that can be paid out. In addition, benefits are only available for a set amount of time, like two years, for example. Costs for the care you receive that exceed the limits are your responsibility.
Potential for Non-Use. Of course, the best-case scenario is that you don’t need to use the benefits. There is always a chance that you’ll never need to use the policy, especially if you remain healthy as you age. Some people may prefer to invest the money rather than spend it on monthly premiums.
The experts and Local Medicare Specialists can help you decide if long-term care insurance is worth it for you. We’re happy to guide you through the process, review the pros and cons, and provide you with a quote for long-term care insurance. Don’t wait to start this journey. Get started with your long-term care planning today.
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We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area which are United Healthcare, Aetna, Humana, Cigna, Blue Cross Blue Shield of Arizona, Centene, Devoted, and Scan. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program to get information on all of your options.