One of the questions that people ask when they near retirement is whether to get insured for long term care or not. An important type of insurance for you to consider and acquire is long term care insurance. However, many Americans do not plan to get insured for long term care despite its significant advantage.
You may believe that long term care insurance is only needed by people aged 60 and above. You may also dismiss this type of insurance because you are still physically fit. In the following scenarios, examine the differences between being insured and being uninsured.
If you are Not Insured for Long Term Care
So you decide to forego insurance and pay the expenses of long term care by yourself using your savings and other assets. You’ll experience minimal challenges in financing long term care through out-of-pocket payment at first. After a while, you’ll notice that long term care services become more expensive annually, which might eventually wipe out your entire assets. The worst case scenario is this, you’ll become a financial burden to your loved ones.
You’ll probably resort to Medicare, but it doesn’t cover long term care. Medicaid, on the other hand, provides limited coverage to people who can’t pay for long term care.
What’s the only option left?
Buying long term care insurance.
It is imperative to get insured for long term care today considering that more people are living longer, which will most likely require custodial care and the cost of long term care facilities continues to soar. Here’s a table of the median cost of long term care facilities today.
If you are Insured for Long Term Care
You finally decided to purchase a long term care insurance policy. The first thing you need to do is compare different types of long term care insurance policies and then choose the most suitable policy for your needs before buying. Most people purchase long term care insurance riders despite increasing their premiums because these features maximize their policy benefits.
Here are insurance riders you should consider.
- Future Purchase/Guarantee Purchase Option – increases daily benefit every two to three years without additional underwriting.
- Simple Inflation – increases the daily benefit by 5% annually.
- Compound Inflation -increases the daily benefit by 3% to 5%, compounded every year.
This is beneficial for people who prefer to receive care at home because this allows them to receive their cash benefit daily regardless of whether they received care or not.
This feature allows couples – married or not, access to a policy that is enough for two people. This means that they can combine their benefits and share them with one another.
Getting insured for long term care is without a doubt the best thing to do since it pays for the high cost of long term care, gives you peace of mind, protects your assets and helps you avoid becoming a financial burden to your loved ones.