Is Long-Term Care Insurance Worth It?

Did you know? It’s Long-Term Care Planning Month. That’s why we’re bringing you a post each week throughout October to help you learn everything you need to know about long-term care (LTC) insurance.

Long-term care insurance is a difficult sell for many people. Most of us would rather just not consider that we’ll need the level of care it covers. Unfortunately, the vast majority of people will live to a day when they won’t be able to handle everyday tasks alone. While family can be a big help in this up to a point, there are usually limitations in what family members can handle and, at some point, many people will end up realizing that in-home care, assisted living or a nursing home is necessary.

When that day comes, many families realize for the first time just how expensive that kind of care can be. If your family, like most, hasn’t thought to budget for it in your retirement savings, a stay in long-term care can deplete much of the savings a senior has worked hard to build up over the years – and even start dipping into the savings of their kids or other loved ones.

Long-term care insurance can help with that, if you think to get it early enough. It’s a smart buy for most people, but a tricky market to navigate for just about anyone.

How to Buy Long-Term Care Insurance

If you rush the process and consider all factors, you could end up with a plan that doesn’t help you when the time comes to use it. If you’re going to make the investment, you should be careful to make sure you get the most out of it.

1. Research long-term care options in your area.

Get an idea for what’s out there and how much it costs. If your loved one would prefer in-home health care for as long as possible, look at some options and reviews and see how much that typically costs. Recognize that even if aging at home is your loved one’s preference, there’s a good chance they’ll need to move to a facility at some point, so check out the assisted living homes and nursing homes in your area and their typical costs as well. And while you’re at it, find out which ones take long-term care insurance and if there are only particular policies, plans, or companies they work with.

2. Research long-term care insurance plan options.

Make sure you get quotes and policy descriptions from multiple providers and look at them carefully. Most plans won’t cover the full costs of long-term care and many will have limitations on what facilities and what types of care they’ll cover. This is where the research you did in step one comes into play: Does their coverage make sense with the costs in your area? Do they offer coverage for homes in your area, and are they the homes that looked the best to you? You don’t want to end up having to move your loved one further away from you or into a facility that feels subpar in order to take advantage of the insurance plan you’ve been paying for.

Give priority in your research to plans that offer inflation insurance. Costs of health care are rising and this ensures your money will go further. Married couples should seriously consider seeking out a shared-benefit policy, which will save you big as you pay less in without diminishing the coverage you get.

Ask lots of questions to make sure you understand exactly what each policy covers. They can be confusing and you’ll be spending enough that it’s worth understanding what you’re buying.

3. Weigh the premium costs against your assets and the costs of long-term care.

There are people for whom long-term care insurance doesn’t make sense. If you have too little to cover the monthly premiums (especially if you or your loved ones are likely to qualify for Medicaid), or if you have enough saved up that you can cover the costs yourself out of pocket, you may benefit from skipping it.

For most people in the United States, getting a plan is the best move; it’s just a matter of finding the plan you can afford and will be happy with. Do the math and factor in your preferences and those of your loved ones. Then make your pick.

Kristen Hicks

Kristen Hicks is an Austin-based copywriter and lifelong student with an ongoing curiousity to learn and explore new things. She turns that interest to researching and exploring subjects helpful to seniors and their families for SeniorAdvisor.com.