Is Long Term Care Insurance Worth It?

Much has been written about long term care insurance and whether the premiums are worth the coverage you may be able to collect upon. In many cases – and you will want to verify this with your financial advisor – long term care insurance is an investment in your future care.

Long term care insurance is one of those policies that many individuals feel they will either likely never need or that they don’t want to pay for because, frankly, they are paying for other more immediate living expenses. In some cases though, investing in a long term care insurance policy will help provide coverage that your traditional health insurance or Medicare or Medicaid will not cover as you age.

Long term care insurance can be expensive but when you consider that it could cost close to $100,000 to reside in a nursing home you can see how it can quickly deplete your life savings. Simply purchasing a long term care policy though will not necessarily cover all of your expenses but it can provide peace of mind for you and your family as it will help defray expenses.

As with many insurance policies, it is less expensive to purchase a long term care policy when you’re young – before you turn 40, actually. The policies are more affordable and you may be able to buy a higher coverage amount when you are still young and healthy. Consider that a policy purchased when you’re young could cost about $5,000 annually and if you are in your 50s or older, it could cost upwards of $10,000 annually so you can see the benefit of purchasing early.

While a long term care insurance policy will not cover all of your medical needs it can help pay for in-home health care, nursing home fees or even the price of attending adult day care. In some cases, having access to this policy may mean you can upgrade your care because the policy will allow for that.

Many long term care policies come with a daily spending limit that ranges from $50 upward to $500 (and even more, depending on the policy). You may also want to look at a policy that adjusts for inflation.

The premium for a long term care policy will depend on the type and amounts of coverage you’re seeking – the more coverage, the higher the premium. As a money saving measure you may want to look at a policy that offers an “elimination period” clause. This means that you would pay for your own care during a specified time frame before the policy kicks in. This is ideal if you have money set aside that can cover your expenses during the elimination period.

Talk with your financial advisor and see if a long term care policy is right for you and your family.