Is Long Term Care Insurance the Best Answer for Me?
How do you pay for long term care needs? Seventy percent (70%) of seniors will need some form of long term care. Yet Medicare and your health insurance policy will not pay for those costs.
Many assume they must pay for long term care (LTC) out of their own funds or purchase long term care insurance. This insurance is a type of policy that will pay benefits when the insured is unable to perform certain activities of daily living (ADLs) such as eating, bathing, dressing, toileting, and transferring.
However, the “classic” LTC insurance product does not have a good reputation as an effective solution. From the buyer’s perspective, LTC insurance has at least three serious deficiencies. First, as with the typical health insurance policy, if the policy isn’t used, the premium payments are “lost.”
It is important to understand that there are other options available–options which did not exist a few years ago. Unfortunately, these options will likely disappear if you wait until a crisis strikes.
Second, to obtain cheaper premiums, the policy must be purchased before age and infirmities become an issue. Many people do not even consider LTC insurance until they are age 60 or older. By that time, the premiums may be so high that LTC insurance isn’t a realistic option.
Third, LTC policies often permit the insurance company to raise the premiums years after the policy was purchased. The hike in premiums can be significant. Just when you may need long term care assistance, you can no longer afford the premiums.
Despite these issues, there may be situations in which LTC insurance is appropriate. A knowledgeable insurance agent can assist with this decision. However, it is important to understand that there are other options available–options which did not exist a few years ago. Unfortunately, these options will likely disappear if you wait until a crisis strikes.
Your willingness to prepare for long terms care needs, should they arise, does not affect only you. It affects your family and others who may be tasked to assist with your care. Come to a free presentation to find out options that may be available to you so that you — and your family — can be better prepared should long term care needs arise.
Steve Wright is a local attorney who provides free, no obligation estate planning and elder law presentations. The option to join by Zoom is available for all our presentations