Only 7.2 million Americans have long-term care insurance. This covers many of the costs of a nursing home, assisted living or in-home care that aren’t covered by Medicare. AARP’s article “5 Things You SHOULD Know About Long-Term Care Insurance” gives you a great look at what you need to know about LTC insurance today.
- Traditional policies are used less. For years, long-term care insurance meant paying an annual premium for financial assistance, if you require help with day-to-day activities. However, typical terms now include a daily benefit of $160 for nursing home coverage, a waiting period of about three months before insurance starts and a limit of three years’ worth of coverage.
- Even if you don’t need insurance, you need a plan. Premiums for LTC policies average about $2,700 a year, which puts the coverage out of reach for many Americans. Plan for this possible expense, by looking at other ways to pay for it.
- A new kind of insurance. As traditional LTC insurance is used less, another policy is growing in stature: it’s whole life insurance that allows you to draw from the death benefit for long-term care. Unlike the older types of LTC insurance, these “hybrid” policies will return money to your heirs, even if you don’t end up needing long-term care. There’s no risk of a rate hike, because you lock in your premium upfront. If you’re older or have health problems, you may be more likely to qualify.
- Basic policies are less expensive. If all you want is cost-effective coverage, traditional LTC insurance has the advantage because hybrid policies are usually two to three times more expensive than traditional insurance, for the same long-term care benefits.
- Get going on this. Begin looking in your 50s or early 60s—before premiums rise dramatically, or your health disqualifies you from coverage.
Speak with your Estate Planning Attorney about Long-Term Care Insurance.
Reference: AARP (March 1, 2018) “5 Things You SHOULD Know About Long-Term Care Insurance”
