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Why Should I Get Long-Term Care Insurance? |
Why
is Long Term Care Insurance
Sound
financial planning requires baby boomers to consider Long Term Care Insurance!!
Q. What is long term care
insurance?
A. Insurance offered by most major life, health and accident insurance companies that pay for the insured’s monthly cost of assisted living rentals and fees and nursing home, extended care if and when needed. Some policies also provide, for an additional premium, home health care.
Q.
Who
does not need long term care insurance?
A. Persons who are wealthy enough to pay up to $40,000 per year, in present dollar values, may not need insurance coverage to pay for the average stay of about six years in an assisted living facility and later, nursing home care. At today’s rate of inflation of about 3% per year, that cost will go up as the years go by. Ten years from now you should expect that cost to be around $52,000 per year.
On the other hand, if a person
has limited income and a limited estate (such as limited real estate or savings,
security investments, etc) and a monthly premium will work a hardship on their
budget and lifestyle, then that person should not go to the expense of taking
out a long term care insurance policy. While
assisted living expenses are not covered by Medicaid, persons with limited
estates are furnished nursing home care by Medicaid after they have exhausted
their estates.
Q. Is long term care insurance a good way to preserve my estate to leave an
inheritance for my spouse or children?
A. Yes,
assuming that you take out a policy at a young enough age in order that the
premiums are reasonable. Some polices are written to provide for a return of a
substantial amount of the premium if the long term care insurance is not needed,
such as in the event of sudden death.
Q.
At what age should I take out
a policy for long term care?
A. The sooner the better, because overall, your premium will be less costly. It is also important to consider the gamble you take on delaying such an investment in the event that your health may change for the worse. Similar to life insurance, if you suddenly have a bad health history, it may prevent you from taking out a long term care policy.
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