Expensive Savvy Senior,
My spouse and I’ve considered buying a long-term care insurance coverage coverage, however we hate the concept of paying costly month-to-month premiums for a coverage we could by no means use. Is there a great rule of thumb on who ought to or shouldn’t purchase long-term care insurance coverage?
There are two key components it’s good to think about that may show you how to decide if buying a long-term care (LTC) insurance coverage coverage is a brilliant choice for you and your spouse. One issue is your monetary state of affairs and second is your well being historical past. At present, round Eight million Individuals personal a coverage.
Who Wants LTC Insurance coverage?
As the price of LTC – which incorporates nursing house, assisted dwelling and in-home care – continues to rise, it’s vital to know that most individuals pay for LTC both from private financial savings or Medicaid when their financial savings is depleted, or by means of a LTC insurance coverage coverage. Nationwide median common prices for nursing house care right this moment is round $92,000 per 12 months, whereas assisted dwelling averages round $50,000/12 months.
Whereas nationwide statistics present that about 70 p.c of Individuals 65 and older will want some form of LTC, the very fact is, many individuals don’t have to buy a LTC insurance coverage coverage.
The explanations stem from a variety of things, together with the truth that comparatively few folks have sufficient wealth to guard to make buying a coverage worthwhile. Seniors with restricted monetary assets who want LTC flip to Medicaid to choose up the tab after they run out of cash.
One other vital issue is that the majority seniors who want LTC solely want it for a brief time period, for instance, after they’re recovering from surgical procedure. For these folks, Medicare covers in-home well being care and nursing house stays of 100 days or much less following a hospital keep of greater than three consecutive days.
So, who ought to think about shopping for a coverage?
LTC insurance coverage insurance policies take advantage of sense for individuals who can afford the month-to-month premiums, and who’ve belongings of at the least $150,000 to $200,000 or extra that they need to defend, not counting their house and autos.
One other issue to weigh is your private well being and household well being historical past. The 2 most typical causes seniors want prolonged long-term care is due to dementia and/or incapacity. And, virtually half of all individuals who dwell in nursing properties are 85 years or older. So, what’s your loved ones historical past for Alzheimer’s, stroke or another disabling well being situation, and do you’ve a household historical past of longevity?
You additionally have to consider gender too. As a result of ladies are inclined to dwell longer than males, they’re at larger threat of needing prolonged LTC.
Selecting LTC Insurance coverage
After evaluating your state of affairs, should you’re leaning in the direction of shopping for a LTC coverage, be sure you do your homework. The price of premiums can differ tremendously ranging anyplace between $2,500 and $8,000 per 12 months for a pair relying in your age, the insurer, and the coverage’s provisions.
Additionally notice that due to coronavirus, it might be harder to qualify for protection now should you’re age 70 or older, in a high-risk group or have had a constructive COVID-19 check.
To discover a coverage, get a LTC insurance coverage specialist who works with quite a lot of firms. See the American Affiliation of Lengthy-Time period Care Insurance coverage web site (AALTCI.org) to find one. Additionally store insurers like Northwestern Mutual and New York Life, who work solely with their very own brokers.
Another choice chances are you’ll need to think about are Hybrid insurance policies that mix long-term care protection with life-insurance advantages. These insurance policies promise that should you don’t find yourself needing long-term care, your beneficiaries will obtain a dying profit.
Ship your senior inquiries to: Savvy Senior, P.O. Field 5443, Norman, OK 73070, or go to SavvySenior.org. Jim Miller is a contributor to the NBC Right this moment present and writer of “The Savvy Senior” e-book.
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