Medicaid Planning

Long Term Care Insurance

Learn here about the cost of long-term care insurance, as well as who needs it and what it can do for you.

Long-term care insurance is insurance that pays for home care and assisted living, as well as nursing home care. There are many policies of long-term care insurance to choose from, making it difficult to know if you’ve got the best one to suit your needs.

Long-term care insurance is also expensive, usually about $2,000 per year for a healthy 65 year old—even more if you’re older than that. If you are healthy and can afford it, you might want to consider buying a good policy. Plan ahead for inflation, though, or your long-term care insurance might not be enough to cover all your nursing home care costs when you need it, depending on how much your policy pays per day. If you purchase your policy when you’re young, you may not have gotten a big enough policy when the time comes for you to use it, depending on how much the care system changes in the decades between when you bought the policy and when you actually need it. Always see a lawyer before you buy long-term care insurance, just to be on the safe side.

There are a few guidelines to follow to make sure you’re getting the right policy for you. Always buy enough coverage, even if you think you’re going slightly overboard. It’s a waste of money to spend all this cash on premiums over the years, only to find out that your medical expenses are even higher and you don’t have enough insurance to pay for it all. Even with long-term care insurance, you could face severe financial strain if this happens. Plus nursing home fees will likely be much higher in the future, when you need to use your policy. As always, err on the side of caution and get the most coverage you can afford.

It’s a good idea to purchase at least 3 years worth of coverage to hold you over the Medicaid penalty time, in case you want to apply for Medicaid and decide to transfer assets after you’re already in the nursing home.

Medicaid only pays for limited home care, so unless you actually go to a nursing home, you will need some sort of financial help with your home care costs. Make sure your long-term care insurance policy includes a home care option to cover these costs. It doesn’t make much sense to pay for an insurance policy that won’t cover all your potential needs. Get everything you might need all at once!

Also, make sure you purchase a policy from a reputable insurance company. Make certain that your insurance provider will still be around when you need them—do they have an A or A+ rating? If not, go somewhere else. Check out many companies and compare premiums before making a final decision.

If you can only afford to buy coverage for one spouse in a marriage, make it for the wife. Women live longer than men and are more likely to end up in a nursing home for a long period of time. This isn’t a guaranteed fact, but it is something to consider when deciding whom to insure.

Long-term care insurance premiums shouldn’t break the bank for you or affect your standard of living now. Premiums are only affordable if paid with money that you would have otherwise socked away into savings. If you’re taking money out of your pocket to pay for the policy, you should reconsider. A general rule is to not spend more than 5 or 10% of your total income on insurance premiums.

If you are thinking about buying long-term care insurance, you should consult with a qualified insurance agent. He/she will help you determine if you can actually afford the insurance and if the policy meets your needs. Long-term care insurance is a hot item right now and has gotten a lot of media attention lately—this doesn’t mean that it is good for everyone. Also consult with an agent who is “Certified in Long-Term Care” (CLTC) and represents several different insurance carriers so that you can choose from many different policies. Visit the CLTC website at: www.ltc-cltc.com to find a certified long-term care insurance agent in your area.