Long-Term Care Policies: An Investment, or Peace of Mind? Woodway TX
Cedar Park, TX
Flower Mound, TX
El Paso, TX
The Woodlands, TX
San Antonio, TX
There are so many considerations when deciding whether to purchase long-term care insurance (LTCI), it’s difficult to know where to begin. Some experts say consumers should approach the question like any investment—in a businesslike, unemotional manner. For others, LTCI offers peace of mind that everyone should have, it’s just a question of “how much?” and “when?” to sign up.
First, some basics. There are many variables to consider, and most of them play into how much consumers will pay in premiums each month.
- What kind of policy to buy?
- A cash policy that pays the benefit no matter how much the consumer spends, as long as they meet the qualifications
- An indemnity policy that pays only for the days on which care is used
- A policy that reimburses consumers only for documented expenses
- How much insurance to purchase—in terms of elimination period or deductible, daily benefit amount and maximum length of benefit period?
- What features will the policy have? For example, will it cover only institutional care, or also home care? Will it have a set benefit, or inflation protection? Will it have a level premium or graduated? How many “activities of daily living” (ADLs) will have to be lost before coverage begins, and which ones are considered?
Even after these questions are answered, policy pricing will be contingent on the age and health of the applicant, family health history, residence location and other underwriting criteria.
To Nancy Curtin, long-term care specialist and president of Smart Future, LLC , it’s a question of choosing the right policy. Because it’s such a complicated decision, she suggests that potential purchasers work with a long-term care specialist (CLTC) and “someone who has your best interests at heart.” She notes that policies can be obtained from “lots of people who don’t really care about you and don’t really know how to set them up properly. You should look for someone with a planning background, a CLTC, and someone who cares about you and can help you put together the right moving pieces to get the plan that’s right for you.”
Most people should have some insurance protection for long-term care, Curtin said she believes. “Even if you’re 50 and in really good health, you need to consider that 30 years from now the cost of long-term care will be about $240,000 per year,” she said. “There was a time when you could count on people to come over and help you with care. For most of us, there aren’t going to be people to care for us the way there used to be.
“You either need to have private insurance, or a nice big nest egg outside of what you plan for your retirement income. Or, you hit the bad road and get on Medicaid,” Curtin said.
She said she doesn’t advise that people invest the money they would ...