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Horizon Elder Law & Estate Planning Blog

Sunday, June 18, 2017

Should I Purchase a Long-Term Care Insurance Plan?

Not many people talk about long-term care, but they should. As the first batch of baby boomers hit the big 65, the conversation will likely gain more traction.

Insurance policies that cover extended nursing care make sense. After all, nursing care and home staff services are expensive. These costs can burn through your savings, especially if you have pre-existing health conditions, becoming more than your family and friends can handle. Buying a long-term care insurance plan will ensure your future physical needs will be catered for. Talk to a California elder law attorney to get started on your application.

The Pros and Cons of Long-term Insurance

Long-term care insurance has some costs and benefits that should be weighed before choosing a plan. Consider:

  1. Financial Preparedness For Long-Term Care
    Up to 70 percent of people who reach 65 require nursing care. Currently, long-term care costs average about $250 per day. For those requiring assisted living services for a year, this adds up to about $91,250. At such a rate, it won’t take long before your savings are depleted. Getting covered will save you from such a predicament. 
  2. Several Policy Options Are Available
    Contrary to what many believe, Medicare does not cover long-term care and Medicaid only offers certain long-term care services to the poor. For the rich and middle-income Americans who want coverage but have too much to qualify for Medicaid, there are several policy options that offer different covers, including ones that can be personalized to meet their needs. 
  3. It’s Better To Have It And Not Use It Than To Need It And Not Have It
    No one regrets paying long-term care insurance. If you do end up in a nursing care facility you will not regret receiving benefits and if you only stay for a while in a nursing care facility such that you won’t need to receive benefits, you won’t regret it either. 

The Cons

  1. 90-Day-Rule
    Many long-term care insurance policies have a 90-day wait period, ensuring benefits are only paid out after an elder person has stayed in a nursing home or assisted living facility for more than 90 days. Interestingly, less than 30 percent of seniors admitted to such facilities actually stay for longer than 90 days, most are discharged before then. This means many of these people never receive their benefits. 
  2. You May Still Have To Chip In 
    Currently, average long-term care costs stand at about $250 a day. Many private policies collect about $3,500 a year in premiums and pay out $150 in benefits. This means that if you do end up requiring long-term care, you’ll have to pay the balance from your savings. 

I want Long-term Care Insurance. When is the Best Time to Purchase?

According to the American Association of Long-term Care Insurance, the best time to purchase the coverage is in your mid-50s. The older you get, the more your premiums will be and the less insurance companies will be willing to cover you, especially if you have pre-existing conditions.

Applicants who apply for cover when young and in good health are more likely to qualify and even receive attractive discounts on their premiums than their much older counterparts.

According to AALTCI’s 2010 Sourcebook, 62 percent of Americans aged 40-49 who apply for the coverage qualify, while only 38 percent of those aged 60-69 do.

If you are thinking of applying for long-term care insurance cover or have applied but have been rejected, talk to a California elder law attorney for advice. Talk to the professional elder law attorneys at Horizonlaw today by calling 925.275.5509.

 




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