Long Term Care Insurance Tutorial What You Need to Know
Long term care insurance pays for that extra help needed when someone who lives with you requires constant medical attention that you alone are unable to provide. This often becomes very expensive, with a nursing homes' private room running upwards to $75,000 per year.
With this expensive care, the associated insurance premiums are also on the higher side. However, paying them might be worth the cost to help reduce the financial burden a bit borne by the long term care medical expenses.
Of course, this insurance has its pros and cons, benefits and drawbacks, yet more and more insurance companies are offering this as a retirement planning option. As we are living longer, it is inevitable that longer-term health issues need to be taking care of, with the medical bills eventually outliving our assets. It is a sad occurrence when we spend 30 to 40 years or more working and saving just to see all spent in a few short years because of a medical condition we have no control over.
I am sorry to disappoint you, but I am not here to tell you that purchasing long term care insurance is going to pay for everything. This is only true if you are willing to pay incredibly high premiums. And if you do, it could very well be the premiums alone that will break you.
Before going further, here are five things to consider as you get started with your own research for a more personalized long term care insurance policy.
1. Daily Benefit Amount. You will typically choose to have a daily payout from $50.00 to $500 per day, or a specified monthly amount.
2. Benefits Depending on the Setting. Some people are taking care of in a facility, while others choose a stay at home. If you choose the home route, the daily or monthly payout may be less, but could last longer in some policies have lifetime maximums.
3. Maximum Lifetime Benefits. And speaking of, know going in how long the coverage will last, either in time, money, or both. Be sure to consider and prepare for the worst case scenarios.
4. Facility or Comprehensive Care. Depending on your long term care insurance policy, care could be exclusively in a facility or more comprehensive, allowing for a wider range of services to be use and paid for. Even though most of the policies sold today are of the comprehensive type, be sure to read before signing.
5. Additional Benefits. As with all insurance, riders may be added for an additional cost. One popular option you may wish to consider is Inflation Protection. Do you know how much health care is going to cost you ten to twenty years or more from now? Even at a standard 3% per year, it is going to be a lot.
These are only a few things to consider when you are out doing research and shopping around for a long term care insurance policy that make sense for you and your family. And there are other costs associated with getting older that may not be covered:
- Ramps and grab bars at your home.
- Gas for the car getting you to appointments.
- Personal care training for family or friends.
- Certain medical equipment.
Yes, there is a whole lot to think about and consider financially, emotionally, and spiritually. Even a millionaire is capable of running out of money depending on the extent of care required. It is a crazy world; the best we can do is to honor God by being good financial stewards of what he has allowed us to have.
Long term care insurance is protecting against the inevitable. Policy premiums may be high, but a catastrophic event is higher. You decide and then tell me below what you think.
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