Do we really need long-term care insurance?

What will happen to my family if I:

  • Become severely ill
  • Cannot care for myself
  • Suddenly die

Why Healthcare Costs Will Make You Sick

  • The 7 things you MUST know before buying Long-Term Care insurance

Six ways to pay for long term care insurance

Self-Insured

Learn more about self-insured.

Medicare, Medicare Advantage, and Medicaid

Learn more about medicare, medicare advantage, and medicaid.

Veterans Administration

Learn more about VA Benefits.

Traditional Long-Term Care Insurance

Learn more about traditional long-term care insurance.

Long-Term Care Insurance with an Annuity

Learn more about long-term care insurance with an annuity.

Long-Term Care Insurance with Life Insurance

Learn more about long-term care insurance with life insurance.

Self-Insured

This means pay for it yourself.  If you have enough savings or a robust retirement income, this is a viable option. However, the cost of long-term care ranges from $40,000+ for a part-time, custodial, in home aide to $100,000+ for a skilled nursing facility. This doesn’t cover possible ancillary medical costs or other living costs you and your spouse might incur as well. Current overall healthcare inflation is between 5%-15% depending on the product or service. Either way, it well out paces the current rate of 1.7%. Even with millions in savings, your funds will quickly diminish.

Medicare, Medicare Advantage, and Medicaid

You might believe if your investments are insubstantial enough to cover long term care, the government will fund it. The short answer is maybe. But the scenarios governing which services are provided by which entitlement program. And the paperwork to apply is perhaps even more daunting. Some of the services also require you to have no assets and completely destitute. And choices are limited with government reimbursement options because most facilities prefer not to accept them. Even without other challenges to contend with, these factors alone could result in inadequate care.

Veterans Administration

First and foremost, you need to have served in the military and have an honorable discharge. So only eight percent of the current population is eligible for this. It is important to note, the VA does not pay for room and board in residential settings such as Assisted Living or Adult Family Homes. The VA provides nursing home care if you meet certain eligibility criteria involving your service-connected status, level of disability, and income.

Traditional Long-Term Care Insurance

This is an insurance product that will pay for assisted living facilities and nursing homes. However, there isn’t just one type of long-term care insurance. Because long term care can refer to several things, not all insurance for it will cover everything. There are home based treatments and inpatient facilities, skilled clinicians and nonclinical care as well as a variety of combinations depending on your needs. It is not only important to understand how much coverage you are purchasing, but what it covers as well. Traditional long-term care insurance also requires you to be in good health without preexisting conditions to qualify.

Long-Term Care Insurance with an Annuity

Annuities have recently been scrutinized by the media. And in some cases, rightfully so. However, they still can provide you with a way to pay for long term care. Annuities can provide monthly payments to those who have been denied long term care insurance for health reasons. There are also some circumstances where this may be a cheaper option than traditional long-term care insurance.

Long-Term Care Insurance with Life Insurance

This is a relatively new product in the marketplace. So, these long-term care/life insurance policies are changing often. Insurance companies developed these for those who were concerned about purchasing long term care insurance yet never utilizing the benefit. Hybrid products like this ensure at least part of the benefit is paid out. Of course, because you are increasing the likelihood of a payout, the premium will also be more expensive.

Frequently Asked Questions

Insurance is a waste of money.

Although statistically people between the ages of 18 to 39 are less likely to die or become critically ill, they will eventually happen. Care in a nursing home is unlikely for someone in that age range. However, if you have a family or loved ones, life insurance with a long-term care rider is much cheaper when you are young.

I’m healthy. Insurance is a waste of money.

Premiums can be expensive. However, new medical technologies and medications are priced over $1,000,000 per treatment. Lengthy hospital stays and long-term care facilities can also cost hundreds of thousands of dollars if not millions. And 2/3 of all bankruptcies are related to healthcare costs. And if your read our article about healthcare costs, you will understand why prices will continue to rise.

I get long-term care insurance benefits from my employer. So, my family and I are adequately covered.

Have you ever considered how much it would cost to be in a rehabilitation center or nursing home for months or even years? Although some employers offer life and long-term care insurance, often times it isn’t enough to keep your loved ones financially secure. In the event you have a catastrophic illness, long-term care coverage will pay for your care, so your family doesn’t have to make that financial sacrifice. You might need to consider a policy for your spouse or other dependent adults too. Most employers do not cover this for family members other than the employee. Also, you lose coverage when you change jobs and replacement insurance costs more as you age so It’s a good idea to have a policy that is not connected to your job especially when you are young and it is cheaper.

I am too old to buy long term-care insurance.

Maybe. There are age restrictions with some policies. However, many people buy policies in their 50s and 60s. And even if you have pre-existing conditions, some insurers will still issue a policy to meet your needs.

I can purchase long-term care insurance later.

Unfortunately, in this case, bad things can come to those who wait. Waiting could cause you to miss your opportunity to protect your family and your wealth. There are many options available and it is worth looking into one that may be right for you.