Long Term Care Insurance – Who Needs It?
Who should own LTCI is a personal decision with no right or wrong answer. The worst thing to do is assume “no” without giving proper consideration to your decision. The time to decide if Long Term Care Insurance makes sense is when you are healthy. Once health changes or you need long term care, the opportunity has passed.
Have you decided to go without Long Term Care Insurance? This is a decision to self-insure this risk and can cost up to $500 per day. That can put the annual cost near $150,000. The main reason to add LTCI to your insurance portfolio is to transfer the risk to an insurance company and insulate your financial assets.
Who will care for you when you can’t care for yourself? As more people are living longer and more people reach life expectancy, chances are increasing that the day will come when you won’t be able to manage on your own. In fact, almost 70% of those over age 65 will require some form of long term care. For reasonable premium levels, you can take comfort in knowing this coverage is in place.
Long term care insurance helps your spouse and children with the obligation to provide the care. Providing term care to a loved one is both a family problem and an individual problem. People often go into nursing homes when caregivers become overwhelmed and are no longer able to provide quality care in the home.
Consider these risks that can impact your assets or life savings:
- Car Accident 1 chance in 200.
- Hospitalization 1 chance in 15.
- Long Term Care 1 chance in 2; however over age 65 it is 7 out of 10.
LTCI provides a solution when you are unable care for yourself, becoming dependent upon others. Care is needed when you require assistance with day to day activities such as eating, getting in and out of bed, bathing, using the WC, dressing, as well as providing dementia care and a safe environment when dealing with dementia and Alzheimer’s disease.
Types of care:
- Home healthcare
- Assisted living
- Nursing home care
LTCI is NOT only for the elderly. Nearly 40% of people needing long term care are under age 54. The U.S. Department of Health recently reported that nearly 70% of all people age 65 and older will need some long term care.
The cost is based upon five factors:
- Personal Information Age, health, tobacco use and family status. Companies give discounts to married couples.
- Benefit Amount Benefits can be paid daily ($200 per day for example) or monthly.
- Maximum Benefit Maximum benefits can be as low as $50,000 to an unlimited benefit.
- Elimination Period The longer the elimination period, the lower the premiums.
- Automatic Increase An automatic increase in benefits can raise the benefit, not the premium, every year.
Does health insurance or Medicare pay? Health insurance typically pays only for doctor and hospital bills.
Some life insurance companies now offer Long Term Care Insurance and other benefits, such as acute care, as part of a life insurance policy. These hybrids may be suitable for some consumers and I urge anyone considering this type of policy to speak with a life insurance professional before making a final decision.
In an upcoming column, I will cover life insurance policies that include coverage for long term care, acute care and accelerated benefits. The right policy may have great value for life’s most likely health risks. Factors such as cost and policy language are key but there are very competitive policies worthy of strong consideration.
Visit www.LifeInsuranceConcepts.com or www.TedBernstein.com for information about life insurance and LTCI.
BIO
Ted Bernstein is a third-generation licensed life insurance specialist and nationally recognized industry innovation expert in alternative distribution strategies and life insurance product development with decades of speaking out and advocating for changes on behalf of consumers. A member of the Association for Advanced Life Underwriting, he was the first to introduce life insurance without commissions or “no-load” life insurance in the mid-1980s and launch the first fee-based Life Insurance Policy Audit and Review service for trust companies and life insurance fiduciaries. His newly introduced innovation, the Installment Life Option, is game-changing. To learn more, visit www.lifeinsuranceconcepts.com or call 561-988-8984.
