Long Term Care (LTC) insurance is usually worth it for most people because it protects against the risk of paying for a nursing home, assisted living, or custodial care out of your savings.
LTC policies can, on the surface, seem to be awfully expensive. This is especially noticeable for women, who pay more simply because they statistically live longer. However, with the average cost of a nursing home currently in the range of $100,000.00 per year (depending on where you live), the up-front cost of an LTC policy can be seen as a huge bargain.
How to Determine if LTC Insurance Is For You
There are a number of things to think about when it comes to LTC insurance:
- Family history – Do you come from a family where people needed help when they were older? Did they outlive their savings and had to rely on family or government help? How healthy were they? How healthy are you now?
- Available financial resources – Once you stop working, how long will you be able to live off your savings and investments? Do you have other types of insurance to deal with possible catastrophic expenses? Will you be able to pay directly for your own nursing care if you need it?
- Cost of premiums – Even if you can afford the LTC premiums now, will you still be able to after you retire? Have you thought about the rate of inflation, now and in the future?
Luckily, there are a large number of LTC policies in the marketplace, each with their own benefits and drawbacks. LTC can be a great investment in your future, giving you control over your options for care as you age. But make sure you choose the right policy for your needs.
What Alternatives Are There?
- Hybrid LTC insurance – These types of policies combine long-term care benefits with life insurance. If you die before you need any long-term care, the insurance becomes a death benefit and can be inherited by your beneficiaries.
- Life insurance with a long-term care rider – With this type of policy, if you need care before you die, you can use the insurance “death benefit” to pay for it while you’re still alive.
- Annuities with long-term care riders – This option also gives you the choice of using the investment for either paying for care or passing on to your beneficiaries.
- Medicaid – A government program available for people below a certain income level. While you can spend down your assets over time to be able to qualify, Medicaid severely limits your choices when it comes to your care.
There are a LOT of options and choices when it comes to planning your future. And the best time to figure it out is way before you need it. Call me this week and let’s start the conversation. I can help guide you through what’s out there and help you find what works best for you.
