Do We Need Long Term Care Insurance?

Do We Need Long Term Care Insurance?

Since the population is aging, I see a lot more discussion of the need long term care insurance (LTCI). There is no doubt that odds are good that many of us will require some sort of nursing care in our lives. This could be assisted living, a true nursing home, or even home health care. And since it is common for this care to cost a few thousand dollars a month, this expense should be planned for.

But do we need to plan with a long term care insurance policy?

Why Consider LTCI?

People purchase this coverage for a variety of reasons. The most common reason is to protect the assets they have built up over a lifetime. Medicare, the federal health insurance program for seniors and disabled people, only covers short term nursing care. Medicaid, the federal program for poor people, requires a very low income and few assets. People do not want to have to spend all of their assets on nursing care so they can qualify for Medicaid. They want to leave their resources intact. They may also want more choices, since Medicaid only covers approved and participating facilities and services.

Is There Another Way to Pay For Nursing Care?

We were very interested in this article about long term care insurace alternatives. There are some other creative financial products that may provide ways to plan for the possibility of needing nursing care.

Why consider alternatives? Well, premiums can get expensive, and they increase as we age. This can be a tough burden for older people on fixed incomes or anybody with a moderate income! LTCI is certainly a popular option, but is not the only product to consider.

Nursing Care Riders – You can find life insurance policies or annuities with provisions to pay out in case you need nursing care. The life insurance policies may pay out a portion of the face value in case of a terminal illness or nursing home confinement.  Their may be similar provisions on retirement annuities. You may also be able to make a deal for a cash settlment on permanant life insurance or an annuity too.

You can look into these options so you can use one of these insurance products to perform a double duty.  They could provide a death benefit for your heirs, in the case of life insurance. Or, if you need it, you can use part of the benefit to help care for you while you are still alive.  An annuity can provide you with retirement income. But, if you need it, it could also help cover the costs of care. Life insurance policies and annuity contracts differ, so you will have to look into the specific plans on the market where you live.

How Do You Know If You Need Long Term Care Insurance?

You need to balance the costs and benefit of a LTC insurance policy. Then look of other ways to fund this potential expense. An estate or retirment planner should be able to help, or you could speak with a local insurance agent. If any of these professionals will only illustrate one type of policy, be wary. A good financial professional should be able to work with you to compare your options.

Related posts:

1. Pros and Cons of Long Term Care Insurance
2. Health Care Reform: Long Term Nursing Care
3. Term Or Perm Life Insurance For Boomers?
4. Term Life Insurance After Age 50
5. 10 Year Term Life Rates Can Be A Great Deal!

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