Should You Get Long-Term Care Insurance?
Did you know? It’s Long-Term Care Planning Month. That’s why we’re bringing you a post each week throughout October to help you learn everything you need to know about long-term care (LTC) insurance.
If you’re already paying for health insurance, home insurance, car insurance, life insurance and who knows what all other types of insurance, you’d probably balk at the idea of adding one more monthly payment to the list. It adds up! You want something left over for savings, vacations and all those little indulgences that make life nice.
That’s understandable, of course, but a growing number of people are facing the difficult and expensive positions of needing to care for an ailing loved one. Many of these families find themselves facing the choice between paying more than they can afford for professional care or risking stress, health, and career to provide that same level of care themselves. Either way, money’s lost, and members of the next generation coming up will find themselves with less to cover the costs of their own care needs as they age.
One way to offset some of this cost and stress is investing in long-term care insurance.
What is Long-Term Care Insurance?
Long-term care insurance typically provides coverage for the costs of different types of care such as nursing homes, assisted living communities, or in-home health care. Many plans will cover part of the costs or only cover certain types of long-term care, but the goal is to help families more comfortably afford the type of care that many seniors will need at some point and that can be very expensive.
Is Long-Term Care Insurance Worth It?
Admittedly, experts have fairly mixed opinions on this. There have been recent instances of people who purchased long-term care insurance only to find their premiums go up unexpectedly years later. It’s a hard decision to make if you don’t know how much to budget for it long term.
Even with that concern though, the families that have it are often very relieved when the time comes to take advantage of it, as long-term care costs can get burdensomely high without it. A 2015 study found that assisted living costs over $43,000 a year on average, home health care nearly $46,000, and a nursing home over $80,000.
Medicare can help with some of those costs, but a lot of it still ends up on the shoulders of family members, unless a senior has set aside ample savings.
Factors to Consider When Shopping for LTC Insurance
Whether or not purchasing long-term care insurance makes sense for you or your loved one depends a lot of on your particular circumstances and the type of plan you get. To make the most informed decision, research your options and consider:
Are there family members willing and able to help with care?
This isn’t something anyone should make assumptions about. Becoming a caregiver for an ailing loved one is a huge time commitment and can cause problems in terms of stress, family, career, and financial costs. If you have a large enough family where responsibilities can be spread around, it might be an option, but the whole family should have a serious discussion about what’s involved and expected if that’s the plan.
What illnesses are common in your family history?
If Alzheimer’s and dementia run in your family than there’s a good chance you’ll be facing hefty care costs down the line. Many other serious and terminal illnesses can come with long-term care needs as well, so consider carefully what you’re at risk for.
What are the preferences of both the senior and family?
Many seniors will need to move into an assisted living facility or nursing home at some point, but many hope to live in their own homes for as long as possible. Families should discuss the associated costs of both options to gain a clear idea of what they’ll be dealing with when the time comes.
How does the monthly cost compare to your savings and income?
What you can afford to pay for insurance will of course make a difference and looking at how your savings compare to the likely long-term costs is an important consideration.
Do you qualify for Medicaid?
Medicaid does help with some long-term care costs, so you’ll want to consider how much that contribution will help as well.
As you can see, the decision is a complicated one. It’s worth getting multiple quotes and reading the details of each plan available carefully. If your loved one is insistent on aging in place as long as possible, make sure any plan you get has an in-home care option. And look into which senior living facilities in your area are covered by the different plans – you want to know your loved one will be able to stay somewhere close when the time comes for them to move into a senior living home.