Do You Need Long Term Care Insurance?
Long term care (LTC) insurance* is for people with prolonged physical illness, a disability or cognitive impairment (such as Alzheimer’s disease). The need for long-term care may begin gradually as you find that you need more and more help with activities of daily living, such as bathing and dressing or independent activities of daily living (IADLs) such as household chores, meal preparation, or managing money. Or you many suddenly need long-term care after a major illness, such as a stroke or a heart attack.
Whether you should buy a long-term care insurance policy will depend on your health, age, income and assets, and overall financial goals. For instance, if your only source of income is a Social Security benefit or Supplemental Security Income (SSI), you probably shouldn’t buy long-term care insurance, as you may not be able to afford the premium. On the other hand, if you have a large amount of assets but don’t want to use them to pay for long-term care, you may want to buy a long-term care insurance policy.
The reasons people purchase Long Term Care (LTC) insurance include following:
1. LTC expenses and burdens can be a financial and emotional drain. Because of this reason, many children have offered to assist mom and dad with the premiums for LTC.
2. The burden of not having LTC coverage may result in guilt from children or spouses who end up being care takers because the cost is too high.
3. LTC coverage can provide peace of mind. Having an LTC policy can put your mind at ease that you likely won’t have to spend-down your assets.
4. Since the vast majority of wealth passes from one generation to the other; from father to son or daughter, for example, many people that have an estate (own their home, have savings and retirement funds, etc.), don’t mind spending their income, but do want the vast majority of what they have accumulated to go to their family, not the government.
5. Most people who have purchased LTC coverage did so because they do not want to be a burden to their spouse, family, or friends, and they want to live an independent life, not having to turn to the government for assistance.
6. Most importantly, many feel the quality of care under Medicaid is not as good as private pay, and that welfare is only for the needy, not for people trying to hide their assets to qualify.
Long Term Care Insurance is an increasingly important part of a good financial plan. Talk to your financial planner and request quotes from several different insurance companies along with important information such as: the insurance company’s history of rate-raising, their financial soundness, and the specific features and exclusions for their LTC policies.
Feel free to contact me for a free quote.
*The cost and availability of insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving insurance, it would be prudent to make sure that you are insurable.