Should I Buy Long Term Care Insurance?
What is long-term care insurance, and why do you need it? And, ultimately, should you buy long term care insurance?
Let’s take a look…
What Is Long Term Care Insurance?
Long term care insurance provides individuals who are 65 or older coverage for nursing-home care, home-health care, and even personal or adult day care.
Who Need Long Term Care Insurance
People who have chronic or disabling health conditions are the ones who need long term care insurance the most, as they are the ones who need constant supervision. Most of the time, regular health insurance such as Medicare doesn’t provide coverage for these, so long term care insurance offers a more flexible option.
How To Save Money on a Policy
Here are a few simple ways you can save money when buying long term care insurance.
The first tip would be to purchase an insurance policy earlier. As with any insurance policies, buying sooner rather than later is a great way to save money and cut costs. Apply early while it is still inexpensive.
For most insurance companies, you can buy a long term care insurance policy up to the age 75. However, the older you get, the more you’ll have to pay, especially if you are already experiencing some health conditions.
Some insurance companies may even deny your application, especially if you are already 65 and above. Ideally, you’ll want to start shopping for long-term care insurance at age 50 or younger.
The second tip would be to work with an independent agent. Independent agents can help you choose from different policies and companies. They can also provide you with a list of companies that will most likely accept you for coverage based on your health. More importantly, an independent agent is not tied up to one company only, so you can get price comparisons between different policies and companies.
However, if you are still young, healthy, and able, you might not need an insurance agent at all. You can get a better deal by yourself.
One more great tip would be to start setting aside a budget for long-term care insurance as soon as possible. Of course, you’ll need to look at your policy options to decide what you’re comfortable spending for coverage. Set a budget, and ask your insurance agent if there’s a policy that fits your budget. Stick to your budget, and do not purchase a policy that’s beyond it.
You also need to set realistic goals and plans. According to a study by the Urban Institute and the United States Department of Health and Human Services, approximately 52% of 65-year-old Americans will eventually develop a disability. And they will most likely need long-term care services. The average spending on long-term care costs will eventually incur around $138,000. If you’re dreading nursing home services, or even thinking about it, long term care insurance also covers home health care.
Lastly, choose a simple policy, and cut costs by avoiding added features or “riders.” Do not buy more than what you need, to avoid paying for more. Ask your insurance agent for quotes on their good, better and best coverage so you can easily compare each one.
Finding a long term care insurance that’s best suited for you should be an easy process. You just need to set aside some time for research, and compare plans and prices.
Should I Buy Long Term Care Insurance?
So, should you get a policy? There’s no easy answer for that. And there’s no right or wrong answer.
It’s really a personal decision. If you have substantial savings and have family who will look after you if you need it as you get older, then long term care insurance may not make sense for you.
If you don’t have a lot of savings, don’t have family to look after you (or don’t want to burden your family) and/or you don’t want to put your estate at risk, then a policy may make sense.