Long Term Care Insurance
Do you need long term care insurance?
As with everything in life, the answer to whether or not you need Long-Term Care Insurance is, well, it depends. A better question to ask may be, “Do I want Long-Term Care Insurance?” If you are considering an investment in this asset, it is really important to do your homework.
Some estimates* place the odds of needing long-term care as high as 68% for those 65 and older. Early enrollment in this type of play is important. Age and health requirements result in only 3 out of 4 people being approved. That’s a very high denial rate, but solid planning with an insurance agent could help you get the coverage you need for the future.
Ironically, people who have led a healthy lifestyle, and those who want to stay in their home, are the most likely to need this type of policy. So, in addition to considering existing health factors, you may want to consider your genetics, and to what extent longevity runs in your family. If you already have millions of dollars in savings, and don’t plan on passing on that wealth, you may not want to spend extra money on a highly comprehensive plan. Also, this type of plan won’t typically pay for treatment that is required longer than a couple of years.
With American life expectancy increasing, quality of living and independence become even more important.
Requirements for long term care insurance
You must need help with two of six daily chores to qualify for Long-Term Care distributions. This is called the “ADL” or Activities of Daily Living. There are many times when you, or yourself and a spouse, may even just need this care for a period of time following a surgery; such as a hip replacement. Other times, when memory-loss, or other severe issues arise, being able to depend on a policy that covers your costs is very comforting. The average cost of home health care has risen to an excess of $6,000.00 (USD) a month in Virginia.
Many early policies were not designed with these huge surges in health care costs in mind. So, this is an area where it really is advantageous to plan ahead, and work with an adviser that can show you the trending cost, and create a plan that meets your budget. Remember, you will have those expenses whether or not you have a plan to rely on.
Which plan is best for me?
Should you look for a reimbursement plan, or a plan that handles payments directly? Do you need a plan that only supplements your retirement income in the event you need help, or one that covers it completely? Are the policy premiums tax-deductible? These are questions best left to an expert in the field. Any real expert will also want to work with an estate-planning lawyer and your CPA to make sure you are receiving the best service possible.
Even if you are not going to pursue Long-Term Care Insurance at this time, it is worth investigating so that you know your options. If you plan on working until your very last day on this earth, you might want to just get a good disability plan instead.
*According to the American Association of Long-Term Care Insurance, “The lifetime probability of becoming disabled in at least two activities of daily living or of being cognitively impaired is 68% for people age 65 and older.” As Mark Meiners, a professor of health administration and policy at George Mason University, points out, “70% of those who reach 65 will need long-term care. With long-term care costing as much as $250 a day, it doesn’t take long to completely deplete a lifetime of savings — even if you’re ‘lucky’ enough to only need it for a relatively short period of time.”
To discuss your options and get qualified unbiased advice, contact Scott LaRochelle for a FREE in-person or phone consultation. Scott's direct phone number is 804-806-5708. OR, if you prefer, book an appointment online. Click here to schedule your free no-obligation consultation online.