Weighing the Pros & Cons of Long-Term Care Insurance
What is long-term care insurance and why do you need it?
Long-term care (LTC) insurance is designed to cover long-term nursing home care and in-home services to meet your personal care needs such as bathing, dressing, housework, taking medicine, and preparing and cleaning up after meals. Most people assume that Medicare will pay for LTC expenses. The fact is that Medicare only covers certain rehabilitation facilities, for a defined number of days, under strict conditions. Medicare coverage is not extended for assistance with “activities of daily living” or other personal care services that don’t require the skills of a professional nurse.Obtaining an LTC insurance policy has many benefits, most of which will allow you to maintain your independence as you age. LTC insurance allows you to preserve your assets and savings, be financially independent, have autonomy in choosing when and how to receive your care, and can relieve your loved ones of the responsibility. If you decide to obtain LTC insurance, it’s important to do your research and evaluate your needs. All LTC insurance policies are not created equal. What is covered, when benefits are paid, and how long care is paid for may vary significantly from policy to policy.
Why long-term care insurance may not be for you
Contrary to popular belief, the average American will never stay in a nursing home, will never need long-term care, and/or the care required will not trigger LTC insurance benefits. Typically, LTC insurance costs about $2,000 to $3,000 annually, depending on your age and medical condition. The biggest risk is that LTC insurance rates may eventually exceed what you are able to pay, and LTC insurance is a use-or-lose benefit. Meaning, there is no equity in past, paid premiums. Experts say that no more than 5% of your monthly income should be spent on your monthly LTC insurance premium. For some, the high costs of LTC insurance may not be worth the potential benefit. However, if you are unable to afford LTC insurance, you are not necessarily without options. Medicaid – a need-based federal health insurance program – may help pay for LTC insurance if you no longer have assets. Additionally, that financial protection will not put you at risk for being kicked out of a nursing home.The decision to purchase LTC is one that should not be taken lightly. If you are considering whether or not to include LTC insurance as part of your financial and/or estate plan, seek help from a experienced lawyer by quickly posting a short summary of your legal needs on Legal Services Link, and let the perfect attorney come to you!
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Posted - 08/19/2016
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