Long-term care insurance is one of those insurances that many people disregard assuming that they are unlikely to need long-term care. However, the chances of needing long-term care is higher than one might think with around 50% of the American population needing some form of care over the age of 65.
Some people decide to personally fund long-term care as and when the need arises but many underestimate the cost which will quickly eradicate the average person’s life savings.
One major consideration when trying to decide whether or not to take out long-term care insurance is the fact that over a third of individuals requiring care are not of retirement age but are younger people who perhaps had an accident or are suffering from a debilitating illness.
The con side of long-term care insurance is that it is not necessarily affordable for everyone and, from the opposite view point, people with significant assets and high incomes might decide not to take out long-term care insurance in favour of just covering the cost from savings. The downside of this approach is that an accident or illness could destroy your earning ability and the cost of care will quickly eat away at your assets.
The securest way to protect your assets is to take out long-term care insurance, as long as you can realistically afford to do so. You can buy insurance that will cover all types of long-term care from a number of insurance companies but the there are a wide range of policies with the level of coverage largely dependent on the price you pay.
The main types of coverage available under a long-term care insurance policy are residential care, home support and skilled care. Care will range from ad hoc home care or regular home assistance to 24 hour residential care.
Long-term care insurance doesn’t come cheap and, as with life insurance, the cost generally increases with age. Factors, other than age, that will influence the cost of long-term care insurance include the level of cover and deductibles.
Deciding what level of long-term care insurance you need can prove quite complex, which is why many people choose to make use of their financial advisor or an insurance broker experienced in the area of long-term care.
Long-term care insurance is an expensive but valuable investment that many people depend on at the time they need financial support the most. Make your decision wisely and never assume that insurance is unnecessary as it will never happen to you. The odds are that at some point in your life you will need some form of long-term care