Long-Term Care Insurance – To Buy Or Not to Buy

Long-Term Care Insurance – To Buy Or Not to Buy

Baby Boomers are living longer and healthier lives than any generation in history, but in progressive years, the majority will require some kind of long-term care.

After 2021, when the oldest Boomers hit 75, nursing home populations are expected to grow dramatically.

Such care already costs more than $100,000 per year and is expected to grow steadily upward. By the time people require skilled care, however, it’s too late to start planning financially. To prepare for their 80s, 90s and 100s, long-term care insurance is an option for people in their 50s and 60s to consider now.

“There is a pretty good chance that something is going to happen to us that will require us to need some kind of care,” says Dane Petchul of Long Term Care Insurance Pros. “The best time to plan is now. The longer you wait, the more you’re going to pay.”

The older a person is, the more premiums go up, and by age 70 a person may no longer be able to acquire coverage, especially if they have serious health issues. Like any kind of insurance, there are numerous companies to choose from and policies vary in price and quality from carrier to carrier.

It is true that there is no guaranteed premium. Some carriers have had multiple rate increases but most of the top carriers have increased rates only once in 20-30 years. Dropping the policy due to a rate increase usually results in the loss of all the payments made.

When purchasing long-term care insurance, you are betting that you’re going to need some kind of long-term care. If you purchased a policy when you are 55 years old at $1872.00 year, in thirty years you would use $58,032 by the time you’re 85. If you are in need of care or a nursing home, you’ve made a wise investment. The cost today for one year in a nursing home is over $75,000. So, you have already broken already.  If you are fortunate to never require any long-term care, the money goes by the wayside with all the other insurances you’ve paid for and never used.

The reason people buy such insurance is to protect their financial assets, so they can leave something to their children instead of having it all go to pay for nursing home costs in addition as staying in control and choosing where and how they received care. In addition, they are negative to becoming burdens to their children.

The buy of long-term care insurance depends on the person’s financial situation. If they have little or no savings, a long-term care insurance doesn’t make sense. Like many others, that person would probably rely on Medicaid. To qualify for Medicaid, you need to have no more than $2000 in assets.

Some lawmakers have suggested giving greater state and federal tax credits to people who buy long-term care insurance, hopefully reducing people’s reliance on Medicaid. While it might help, it’s doubtful it would solve the program’s problems overnight.

With the current argue over national health care, some feel it might be best to take a wait-and-see approach. Waiting to see if the government will provide the care you would need is not the best way to plan for one’s future. Everyone should be looking at this and making a conscious decision, how am I going to pay for my health care if I become ill and require some kind of institutional care?” The bottom line is to do your own long-term care planning. Find a long-term care specialist who is independent and has the ability to compare all the top carriers in an objective manner.

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