Planning for the future is tough when it comes to your own mortality. None of us wants to think about our final years, but if you’re nearing retirement age, you’re well aware that long-range financial plans can help you afford a better life.
It may be hard to imagine now, but someday you may be incapable of living on your own. Many elderly people develop chronic medical conditions that require assistance with routine daily activities. Buying a long-term care insurance policy is one way to prepare for this and protect your nest egg from being absorbed by the cost of full-time care.
At Benafica, we’re here to help you navigate the insurance world and choose the right coverage for your needs. Let’s take a closer look at long-term care insurance, who qualifies, and who should consider buying a policy.
As people get older or become chronically ill, they sometimes need help accomplishing daily tasks like getting dressed, bathing, preparing and eating meals, and more. Assisted living centers, nursing homes, and in-home nurses provide this type of long-term care, but it can be very expensive, and most regular health and disability insurance policies don’t cover it.
Long-term care insurance policies sold today are comprehensive, providing coverage for care and services such as:
Once you’re eligible for long-term care benefits, most insurance plans will pay a specified amount per day to cover disability costs.
Not all long-term care policies are the same, so it’s important to talk to an insurance expert to find the best coverage plan for your needs.
While there are no age restrictions on long-term care insurance, most insurance companies recommend you purchase a policy as early as 40 years old and no later than the age of 60.
You don’t want to buy the insurance too long before you need it, but you also don’t want to wait too long, because applicants for long-term care insurance must be in good health. You won’t qualify for long-term care insurance if you already have a debilitating condition.
Long-term care insurance can help give you peace of mind that no matter what happens to you later in life, you’ll be well taken care of. You should consider buying it because:
Plus, Medicaid benefits have been cut periodically. This leads to cutbacks at nursing homes, causing some providers to refuse to accept Medicaid.
That said, buying long-term care insurance might not be affordable for you if you make a low income and have little savings. Experts recommend spending no more than 5% of your income on a policy.
When you buy a long-term care insurance policy, you get to choose the amount of coverage you want. The policies typically cap the amount paid out per day, as well as the amount paid during your lifetime.
Under most long-term care policies, you’ll have to pay for long-term care services out of pocket for a certain amount of time before your insurance provider starts reimbursing you. This is known as the “elimination period,” and it may last 30, 60, or 90 days.
The rates you’ll pay for long-term care insurance depend on many factors, including your:
As you can see, many factors come into play when it comes to the cost of long-term care. If you’re looking for an average, MarketWatch says the average annual premium for a 55-year-old couple in 2020 is $3,050. For a 55-year-old female, the average is $2,650, and for a 55-year-old male, the average is $1,700.
While long-term care insurance is a great option for many people, it’s not a good fit for everyone. The good news is, there are alternatives! We recommend speaking with an insurance expert to decide the best course of action for your circumstances.
Benafica provides group and individual brokerage consulting and exchange services to help enable clients to mitigate costs while also improving health and well-being. If you’re considering long-term care insurance, we can help you examine the important financial considerations, make decisions about your policy, and inform you about cost-cutting strategies to reduce your premiums.
We are here to protect and empower you through insurance tools and services! To get in touch with a representative of our team, please fill out our contact form here or call 651.259.9000 . We’re open Monday through Friday from 9 a.m. to 5 p.m.