Long-Term Care Insurance

Long-Term Care Insurance

Most of us will need long term care insurance as we get older. But even the most well-thought-out strategy may not be enough to prepare you for the unexpected costs associated with long-term care.

Purchasing a long-term care insurance policy can be an effective way to protect against the often-devastating costs of long-term care. In the right circumstances, a good long-term care insurance policy can help you avoid exhausting your life savings to cover needed long-term care services and maintain access to the widest variety of quality service options. It may also provide you with greater choices and help you avoid depending upon the financial assistance of family or friends.

Not everyone is a candidate for long-term care insurance. Long-term care insurance is not offered on a guaranteed issue basis and companies may deny coverage or limit benefits during a preexisting condition waiting period if you do not meet their “medical underwriting” standards. If you already have health problems (e.g., Alzheimer’s disease, Parkinson’s disease or other less serious conditions), insurers may consider you to be a high risk and decline to issue a long-term care insurance policy.

You should NOT CONSIDER buying Long-Term Care Insurance if:

• You can’t afford the premiums.
• You have limited assets.
• Your only source of income is a Social Security benefit or Supplemental Security Income (SSI).
• You often have trouble paying for utilities, food, medicine, or other important needs.

You may want to CONSIDER buying Long-Term Care Insurance if:

• You have significant assets and income.
• You want to protect some of your assets and income.
• You want to pay for your own care.
• You want to stay independent of the support of others.

Even if you are medically eligible, long-term care insurance might not be affordable for you. If you are living on a limited or fixed income or if you must go without basic needs to afford the premiums, you certainly should not buy a policy. You must also consider whether you are going to be able to afford the premiums throughout your lifetime, since it is not unusual for a policyholder to pay premiums for more than twenty years before needing services.

You should also be clear about what assets you hope to protect by buying long-term care insurance. If you do not have significant assets, long-term care insurance may not be an appropriate purchase for you. Under the right circumstances, long-term care insurance could be the best way to protect your assets, including your home. Since long-term care insurance is a major financial commitment, before you buy any coverage, understand your options and look closely at your needs and resources.