Recently researchers at two well-known Universities released a report that stated almost 70% of individuals at age 65 or older would need some type of long-term care. This care may be provided in a nursing home, assisted living facility or at home. Unfortunately, however, the cost of long-term care insurance continues to climb. Currently, a 55-year-old couple can expect to pay about $3,275 in premium for $164,000 in coverage for each that grows by about 3% per year, according to the American Association for Long Term Care Insurance.
Long Term Care Insurance does not make sense for everyone. Medicaid is available to help those people with little money or assets but there are limits to this coverage. People with considerable assets of $2 million or more will more than likely be able to afford paying out of pocket for long-term care however, a policy may still be considered if the goal is to leave money to their heirs.
Many will fall in between these two classes of income and assets are the target market for Long Term Care Insurance. The market for long-term care insurance is constantly changing so be sure to obtain solid advice from an insurance professional.
Most Long Term Care policies offer many different features that can have a significant impact on the annual premium and whether the product will mitigate the risk appropriately. It is also important to avoid many common mistakes made by those shopping for long-term care insurance:
- Waiting to long to make the purchase – rates go up with every birthday
- Buying on price alone – like anything, you get what you pay for
- Underestimating the effect of inflation – this policy is for “down the road”, inflation matters
- Failing to read the fine print – your reputable agent should point out the possible pitfalls – most every policy contains them
With Long Term Care Insurance, there is no do-over. Once you know your policy is inadequate it is usually too late. It is incumbent on the consumer to educate yourself of the benefits and pitfalls of a long-term care insurance policy and the best way to accomplish this is to deal directly with an experienced agent.