Do You Need Long Term Care Insurance?

August 3, 2012 · 0 comments

This Is A Guest Post With Information Sourced From Genworth Financial:

According to a recent study conducted by Genworth Financial, at least 70% of people over age 65 will require some long-term care.  In addition, 40% of people under age 65 already require long-term care. With statistics like those, it’s safe to assume that at some point either you or a loved on will need long-term care.

With the likelihood of care on the horizon, it is important to consider the potential costs of care and the options available to you to help alleviate the financial burdens that a long term care scenario could bring.  Generally, there are three ways to pay for long-term care, each with their own very different ramifications.

 Public Funding

This includes Medicare and Medicaid. Medicare can help pay for some expenses, but there are rigid constraints that need to be met, and anyone with a long-term condition requiring constant care may not be covered.  Medicaid, on the other hand, is for the indigent.  To qualify, you have to be below a certain income threshold to qualify. It’s key to understand the regulations and limitations carefully to determine if either Medicare or Medicaid is personally viable.

Self-Funding

A small percentage of people might be able to pay for care out-of-pocket or with the help of family and friends. Again, one should consider the costs that you could accrue if you require daily care over a sizable timeframe . A hard-earned nest egg can quickly disappear with large medical expenses, not to mention the enormous emotional toll that could follow when relying solely on family and loved ones for financial and emotional support.

 Long-Term Care Insurance

A long-term care insurance (LTCi) policy provides you with the most flexibility, as it allows you to find care in the type of facility and state of your choice.  In addition, LTCi does not exclude certain common conditions including stroke and Alzheimer’s disease, and is often the most reliable way to ensure you have control of financial, emotional, and physical well-being when you need it most. It’s important to be aware that purchasing a LTCi policy in your younger years and while still in good health will also cut down the costs of a policy significantly.  It’s important to give some thought to your options early on before it becomes a necessity.

So you say to yourself, “long term care insurance seems to be the secure option to protect me from the financial burdens of long term care, but is it truly a necessity?  The “yes you need to have it” argument basically says that most people do need LTCI.   While the poor has access to Medicaid and the wealthy can typically cover costs on their own, these options are not available to most of us.

The important thing to understand is that there are a wide range of policies offering different degrees of security, but all  are preferable to taking the chance of being financially decimated. It’s also important to note that the cost of long-term care insurance (LTCI) is also rising.  Today, Americans are paying approximately $17,520 more per year for a nursing home than they did in 2005, and the cost of care is rising exponentially.  It’s in your interest to understand future long term care costs and create some projections. There many articles and resources available at your disposal to assist with your long term care decisions – I highly recommend the recent NPR series Family Matters, which covers a variety of topics discussing aging and long term care.  It will take a bit of research, but eventually you will be able to arm yourself with enough information to make a confident decision regarding your long term care plan.  Once you do, I urge you to speak with you family and loved ones, and then with a professional.  You will find comfort in knowing you’ll have a plan in place whether you need it or not.

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