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Who Needs to Purchase Long Term Care Insurance?
No one wants to think about death and because of that, we often don’t think about the events that will lead up to death. It doesn’t matter if your life ends naturally from old age, abruptly from an accident, or after a battle with a significant illness or disease. At some point you may find you need long-term care. That care may be provided by friends or family, but in most cases it’s provided by skilled nurses in facilities set up to provide the highest level of care possible. Unfortunately, that care can be quite expensive.
Consider Your Age and Health
While it doesn’t necessarily make sense to buy long-term care insurance while you’re young, you don’t want to wait too long to make that purchase. The older you are, the more likely you are to need the coverage and some insurance companies have age restrictions. According to research conducted by the Center for Medicare and Medicaid Services, more than 70% of individuals over the age of 65 will need to take advantage of long-term care at some point. That’s an alarmingly high number, but one that should be considered carefully.
Yes, individuals ages 65 and older will have Medicare coverage, but Medicare won’t cover all of your long-term care costs. They’ll cover 100% of your costs for the first 20 days; the difference after you pay $140 each day for days 21 to 100; and nothing after day 100.
On the other hand, those with Medicaid will receive benefits based on a low income requirement. Medicaid offers broader long-term benefits than Medicare, so if you already qualify, you likely won’t need long-term care coverage to go with it.
All things considered, most experts recommend thinking about long-term care insurance while you’re still in your 50s. The healthier you are, the lower your premium rates. The average person in his 50s is still in good health and, depending on the policy you choose, you may be able to buy a minimal amount and then add to your coverage limit later.
Once you make a purchase, your rates are locked no matter how your health changes. If you should develop AIDS, need help with your activities of daily living, develop Alzehimer’s or dementia, have metastatic cancer, or have a stroke before you try to purchase coverage, you’ll likely be denied.
Consider the Costs
The cost of long-term care is astronomical. The average nursing home stay in 2011 came with a bill of $77,000 for a year. If you’re insistent on staying in your home, the cost of having full-time care in your own residence can be even higher.
A lot of people think they can cover the cost of long-term care through the use of a retirement fund but the reality of the situation is that you could drain your entire fund rather quickly in the event of a serious illness.
Long-term care insurance can be purchased independently or can be combined with a life insurance policy, maximizing benefits for individuals who are having a difficult time buying a stand-alone policy. Don’t wait until it’s too late to start asking about this critical coverage. Talk to your insurance agent about your health and your options as soon as you can.