The truth is this: buying long term care insurance is a necessity for most Americans at this point. After all, covering the costs out of pocket is a big risk that only the truly wealthy can afford. Moreover, no one really wants to spend down their assets in order to qualify for Medicaid and receive long term care benefits. And besides, it’s too risky to rely on Medicaid alone because of the looming budget cuts.
Yes, insurance policies may be costly, but there are effective ways in which Americans can reduce long term care insurance premiums. At the end of the day, the benefits outweigh disadvantages.
However, if you are still unsure if this type of coverage matches your needs, then here are six considerations in buying long term care insurance.
Financial Readiness in Covering Care
According to Genworth’s Cost of Care for 2016, the average price of staying in a nursing home for a year is $92,378. As these figures have been increasing in the recent years, there is no telling how much it will be when we need care services.
Without coverage, people would have to find other means to pay for these services. In fact, some have even lost their lifetime savings as they try to cover the expenses. Additionally, many are losing confidence in saying that they have the financial means to live comfortably during the golden years. Studies show that only 21% can confidently say that they have saved enough money for retirement.
A Means to Safeguard Your Family Members
People often forget this, but family members also take the blow that comes from the lack of planning. This is seen in the growing numbers of individuals sandwiched between providing care to an aging loved one, supporting and raising a child, and managing a career. In fact, 1 of every 8 individuals age 40 to 60 is in that very situation at the moment.
Buying long term care insurance not only protect your child or spouse from joining the Sandwich Phenomenon, it also provides a good safety for when your parents need your help.
Your Age When Buying Long Term Care Insurance
Many Americans often neglect to consider their age in buying long term care insurance. They would often delay even thinking about it because people typically need the services in their 70s or 80s. In doing so, they end up becoming uninsured, spending their retirement income and outliving it eventually or worse, they become a financial burden to their loved ones.
However, there is a reason why insurance experts are adamant in pushing Americans to start planning early. The general rule is that the younger and healthier you are when you buy long term care insurance, the lower the premiums will be. This also means a higher chance of being granted a policy. The prime age to purchase according to experts is when you’re in your late 50s to early 60s.
Where You Live
Care costs vary depending on the location, so be sure to check how much the charges are in your state. The costs of care are more affordable in states such as Louisiana and Alabama compared to those in states like Alaska or Massachusetts.
Here’s the list of the 15 most expensive states for long term care based on Genworth’s recent survey:
- Alaska – $117,800
- Massachusetts – $73,307
- Connecticut – $72,671
- Hawaii – $71,820
- New Jersey – $68,833
- Delaware – $68,472
- New Hampshire – $66,044
- New York – $65,852
- Maine – $64,423
- North Dakota – $64,010
- Vermont – $63,139
- Washington – $61,704
- California – $61,239
- Rhode Island – $60,789
- Maryland – $60,305
Where You Want to Receive Care
One of the coveted freedoms long term care insurance provides is the ability to choose where you want to receive care. Buying long term care insurance provides the means to age in place, move to a nursing home, assisted living facilities, CCRCS and other retirement communities. Home care is typically covered by most long term care insurance policies, but make sure to consult with your insurance agents regarding this.
Asking these questions can help you choose the most fitting facility for your future care needs:
- Can I receive care while at home? And who will take care of me while I’m at home?
- What long term care services and facilities are available in my area?
- What type of long term services or services can provide me the care I need?
The Long Term Care Insurance Carrier
Truthfully, insurance policies vary depending on the insurance company that you approach. Consider companies that have A+ or A++ ratings from A.M Best, Moody and the likes to make sure that you are choosing a company with a high financial strength. This is why people are strongly encouraged to contact various carriers when requesting long term care insurance quotes.
Do not settle for the first quote that you see and do not be discouraged if the prices you are faced with are too high. Shop around, request for instant long term care insurance quotes online and consider each carefully.