Long Term Care Insurance – Who Needs It?
This week I think about long-term care insurance and whether that you should consider taking out a policy. It does not rank as one of the best investments for everybody, but you should consider carefully whether it may provide you with the assurance of continuing care that you need. As with all insurance, there is a chance that you will not see a return on investment, but you may want to pay for peace of mind.
Long-term care covers many services beyond the routine medical requirements, including help with eating, bathing, dressing, and getting around. In fact, ordinary health insurance does not provide any benefits towards long-term care, but the need for long-term care is very real as there is about a 50% chance if you’re 65 that you will spend some time in a long-term care facility.
People generally fall into one of three camps when considering this type of insurance. They may have enough money in their investments that they feel confident they can cope with the costs should they arise. The actual cost of long-term care services is on average about $30,000 per year, although it can be much higher, so these people may decide that they will face these costs if they need to.
On the other hand, they may have so little spare income that they cannot afford the premiums, which may be $2000 per year, and decide that they hope they qualify for Medicaid if the need arises. In fact, long-term care insurance for these people would only save the state money, not them.
Long-term care insurance is sold to the third group of people who have sufficient funds to afford the premiums and want to feel secure. Your investment advisor should be able to help you determine if it is right for you. Contact Ken Himmler (www.kenhimmler.com), or Integrated Asset Management (www.iamllc.biz) for advice.
If you decide to afford long-term care insurance, it is something you need to think about sooner rather than later, and you should not wait until retirement age. If you apply in your 50s, there is a one in 10 chance that you’ll be rejected; in your 60s, the charts increases to two out of 10; by the time you’re 70, the chance of rejection is four in 10. The younger you apply, the cheaper the premiums will be, so you cannot afford to wait until retirement. Be sure to read the fine print to check that you are getting the coverage that you want.
Authored by Kenneth Himmler, Sr.