Is long-term care insurance a wise move? Here are five questions you can ask to determine if this type of insurance would be beneficial for you.
Are you living a healthy life?
Being healthy may mean you are more likely to need care. Often, the healthiest people are the ones who ultimately require long-term care assistance in life, while less healthy individuals may face heart or cancer issues earlier.
What does your family health history show?
What are the longevity and health records of your grandparents, parents, aunts, uncles, and siblings? Did any of them require care later in life? Who was there to assist them? What if they needed care? How would that affect the family?
What kind of care might you need?
What if you broke a bone later in life? What if your mind remained fully alert, but you needed help with cooking, cleaning, and dressing, and did not want to move in with a family member? Who would help you, and how would you pay for their assistance?
Can you afford the costs?
Long-term care insurance has adjustable features. Like buying a car, you can get all the extras and pay for them, or you can purchase a basic model that costs less and provides you good coverage. The main downside of long-term care insurance is the same as any type of insurance: you may pay premiums for years without using the coverage.
What are the odds?
According to the Long-Term Care Insurance Association: “The total lifetime likelihood of disability in at least two activities of daily living or cognitive impairment is 68% for people aged 65 and older.”
Conclusion
Long-term care insurance allows you to maintain your independence and afford quality care, and it also helps reduce the financial and emotional stress that a long-term care event can place on your family. The downsides are the cost of premiums.
Whether you purchase insurance or not, you’ll want to put a plan in place so you and your family know what to do if you need care. This plan should include discussions with family and friends about their ability to help if and when support is needed. You may also want to consider alternatives to long-term care insurance, such as arranging to live with family or friends or moving to a continuing care community.
The Balance does not provide tax, investment, or financial advice. Information is provided without regard to the investment objectives or risk tolerance or financial circumstances of any specific investor and may not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk, including the risk of loss of principal.
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Sources:
– California Department of Insurance. “Long Term Care Insurance.”
– California Partnership for Long-Term Care. “Cost of Long-Term Care.”
– American Association for Long-Term Care Insurance. “Long-Term Care Insurance Facts – Data – Statistics – 2020 Reports.”
– American Association for Long-Term Care Insurance. “Long-Term Care Statistics.”
Source: https://www.thebalancemoney.com/pros-and-cons-of-long-term-care-insurance-2388725
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