Long-Term Care Insurance

After the Baby Boomers take care of their parents’ in their last years, they start to focus on how they will pay for the care that they will need when they are old and infirm. Are you in your 50s or 60s? Do you have a plan for paying for the care that you and your spouse will need in your later years? Do you have any idea how much it will cost?

Health insurance or Medicare will not pay for someone to help you get dressed or bring you to the bathroom. Medicaid will not pay for those types of services unless you are absolutely poverty-stricken. Assisted-living in New Jersey can cost over $100,000. If you or your spouse get Alzheimer’s disease, you can be looking at 5-10 years of needing care. Do you have that kind of nest egg?

Long-term care insurance is usually obtained when you are healthy and don’t need it. As a matter of fact, you must pass a physical exam for an insurance company to offer you the insurance. If you can’t pass the physical or you are past the age limit, the insurance company may not want to insure you. Or they may charge you such a high premium that you cannot afford it. That is why the insurance agents urge you to start thinking about it when you are in your 50s.

Long-term care insurance is not for everyone but it is worth it to talk to an insurance agent who specializes in this type of insurance. You want to ask them about what type of coverage you are buying (nursing home only or it will also pay for care in your home or adult day care centers). Will the coverage start immediately or will you have to wait before the insurance starts paying. Typically, different waiting periods mean different premiums like getting a high deductible on your car insurance. How much per day does the policy pay out and will that amount pay for the total costs? This issue is hard to evaluate since you are buying coverage that you may not use for 20 or 30 years. Who knows how much your care will cost so far in the future. Many policies come with inflation riders. If you don’t get an inflation rider, you may be paying a large chunk of the long-term care out of your own pocket. How long will your policy pay out? You can choose a set number of years or until you pass on. Obviously, the longer the insurance policy pays out, the higher the premium. Will you need to be hospitalized before the insurance coverage starts? Many times, you need help when you can’t remember things and walking or feeding yourself becomes too difficult.

Compare policies to see which offers the coverage you want and has the best premium to pay for the coverage. It is possible that you will never need long-term care insurance. But there are many scenarios in which this type of policy will be very needed. And assume that, unless you are very wealthy, you will not be able to save enough to pay for your care. For those of you thinking that your children will take care of you, please think through the scenario of your child taking you into the shower and washing you, taking you to the bathroom and wiping your bottom. Many of us don’t want our children to see us that close and personal. Until another alternative comes along, long-term care insurance should be at least considered, even if you decide that it’s not right for you and your family.