I work with people to help them decide if long-term care insurance is right for them. I do this by focusing our conversation in three distinct areas, which then allows me to suggest a course of action.
People have different reasons for considering long-term care insurance. For some, it’s the recommendation of their financial adviser or attorney. For others, it’s because they have been the caregiver for an aging parent or a terminally ill spouse.
Every person has a different financial profile. For those on a tight budget, a bare-bones policy may be suitable. For others who are affluent, a generous policy with lots of bells and whistles may be appropriate.
In addition, it is important to take health status into consideration. People in good health will have no trouble securing long-term care insurance while those with health problems may find their options to be limited.
What is long-term care?
Long-term care is the daily care a person requires because of chronic illness or disability. It is an ever-changing array of services aimed at helping people to compensate for limitations in their ability to live independently. It can range from needing assistance with household chores to requiring highly skilled nursing care. It can be delivered in one’s home, in an assisted living facility, in an adult day care center, or in a nursing home.
What is long-term care insurance?
Long-term care insurance is a form of insurance that transfers the risk from you to the insurance company. As with other forms of insurance, a premium is paid. Many levels of care are funded should you become unable to care for yourself.
Is long-term care insurance necessary? Why is it so important?
Consider the following facts:
• Currently, the cost of nursing home care in New England can be upwards of $300/day.
• Medicare does not pay for long-term care.
• People are living longer today than at any other time in our history. The fastest growing segment of our population is over age 65.
• Many women, once the primary caregivers to family members, are now in the work force because families depend upon two incomes.
• Seventy-six million baby boomers are aging fast.
Is long-term care insurance right for everyone?
Not everyone is a good candidate for long-term care insurance. If you have limited assets, Medicaid and community-based programs may be better suited to meet your needs. On the other hand, if you have assets to protect, long-term care insurance is probably the best option for you to pursue. My rule of thumb is that you should be able to comfortably fit this item into your budget. However, if purchasing long-term care insurance is going to impact your lifestyle (e.g., take away your only vacation for the year), this purchase may not be right for you.
Long-term care insurance can keep many families from being financially devastated if confronted by a long-term illness that requires assistance with daily care. Long-term care insurance allows you freedom of choice so that you will not have to rely upon the government for help with long-term care. Long-term care insurance is a sensible and cost-effective way for many people to protect themselves so that they can remain independent and not feel like a burden to their family members. Long-term care insurance is one of the most nurturing gifts that parents can give to each other while also sharing a loving gift with their children.
At what age should I purchase long-term care insurance?
The majority of people who purchase long-term care insurance are between the ages of 55 and 64, although the premiums are less expensive for younger people in good health status. Oftentimes, people in their 40’s are motivated to purchase long-term care insurance if they have a parent who has had a diagnosis of cognitive impairment.
Do you have questions about long-term care insurance? If so, post them here, and I will provide you with answers.
©Circle of Life Partners™