About 70% of the elderly will need some form of long-term care at some point. This type of care can consist of a nursing home or various forms of home care, whether it is skilled nursing care, assistance with activities of daily living, or a combination of services.
The problem is that these services are very expensive – and the cost is not covered by Medicare, beyond a 100-day period in which skilled nursing care is covered for those who qualify and which does not cover non-medical care.
Medicaid does cover some of the cost of long-term care, but the income requirements to qualify for Medicaid assistance are very strict. It’s not unusual for older adults to spend everything they have on their care to qualify for it, so that by the time they get close to poverty.
This can be prevented with LTC insurance. But this policy brings its own challenges – and not everyone is a good candidate. Here’s an overview of when you should and shouldn’t consider long-term care insurance.
If you have assets you want to protect. If you have significant assets, such as a valuable home or savings account, that you want to protect and bequeath to your family, you may want to purchase LTC insurance. If you can afford it, this type of insurance will cover your long-term care without you “spending” to meet strict income requirements.
If you have a health background that suggests you need it. Long-term care policies can be expensive in their own right, sometimes involving significant out-of-pocket costs. Essentially, you’re betting that one day you’ll need long-term care. However, if you have a history of health problems in your family that typically require this type of care, such as dementia, diabetes, or cardiovascular disease, you are more likely to need it yourself.
If you don’t have family to rely on. If you don’t have close relatives who can care for you, getting long-term care insurance may be a better choice. That said, even if you have a family member who is ready and willing to care for you, he or she may not be able to provide the kind of care you need as your situation progresses – or the financial or job of your future caregiver. situation will change and make caring for you less of an option. Regardless of whether you have family members who can care for you – and you should discuss this with them first – it’s important to take the steps necessary to prepare for your future.
If you can afford it. Long-term care is expensive. In general, you should only consider long-term care insurance if you have at least $75,000 in assets, not including your car and home, and an annual income of at least $35,000 per year (although this can vary by state) according to the United Seniors Health Cooperative . Premiums can also rise significantly, so you need to be sure you can afford them comfortably without making huge sacrifices.
Because of cost, it is never easy to make the decision to buy long term care insurance. But for many seniors, it can be crucial. Do some research on your options and hopefully you can make the best decision for your situation.