Long-term Care Insurance May Be Getting More Expensive
My favorite long-term care insurance agent keeps reminding me that the premiums on long-term care are about to go up for one of her best carriers. Another carrier, which requested a premium increase approval in Florida, is unlikely to get it, causing that carrier to leave the market all together. The message: Get while the gettin’s good. (Remember, I’m from the South.)
Good Tidbits to Know About LTC Insurance
Long-term care insurance is not my specialty, and while I might be able to sell it, I don’t. I do recommend that clients integrate it into their financial plans when it makes sense (and it almost always does). Some good tidbits for you:
- LTC insurance is designed to protect your assets (your nest egg). It can help cover the cost of care you receive at home from nurses’ aides, home health aides, and therapists, and can help cover the cost of assisted living facilities and nursing home expenses.
- In CA in 2010, the median annual care cost for a private room in a nursing home was $87,000. For a semi-private room, about $73,000. The increase in cost outpaces the inflation rate.
- At least 70% of people over age 65 will require some long-term care services at some point and 40% will need care in a nursing home.
- Elderly women are most likely to utilize the service because they live longer, healthier lives.
- Health insurance and Medicare cover almost none of the cost of nursing homes, assisted-living facilities or in-home care.
- To qualify for Medicaid, people have to pay out of pocket until they are practically destitute (particularly if proper planning hasn’t happened ahead of time).
- Better to obtain insurance when you’re younger and healthier and it’s cheaper. Not to mention that you’re in a healthier state of mind (not in crisis) and can plan.
- Long-term care insurance can be used to cover the care of someone with Alzheimer’s, an affliction that can last for many years and deplete a family financially.
- LTC premiums can be paid with Heath Savings Account (HSA) monies.
- If you’re self-employed, a portion of your premium may be deductible as health insurance.
- Anyone can pay the premiums on the policy. Children can pay for LTC insurance to protect against the family vacation home (or any other asset) being sold to meet long-term care costs.
- Remember, your children might be picking your nursing home. How many choices do you want them to have?
If you need a referral to a long-term care specialist, please let me know. I can help you figure out whether LTC insurance makes sense in your overall plan. A specialist can tell you what to look features to look for, what to consider when buying a policy, what riders are worth it, which company to choose, and how much to pay.