Why to consider long-term care insurance
I often suggest long-term care insurance to my clients, and I almost always hear this objection: “It’s too expensive.”
Yes, long-term care insurance is not cheap, but medical insurance and Medicare typically do not cover that particular type of care, and it is incredibly expensive.
The 2017 Genworth Cost of Care Survey lists the national median cost for a private room in a nursing home as $267 a day, which is $8,121 per month, and $97,455 per year. Rates in this region are typically considerably higher.
As you can see, if you need that care, your money could disappear very quickly. And, unfortunately, odds are you may need long-term care.
On its website, the U.S. Department of Health and Human Services says:
- Someone turning age 65 today has almost a 70 percent chance of needing some type of long-term care services and supports in their remaining years.
- Women need care for longer (3.7 years) than men (2.2 years).
- While one-third of today’s 65-year-olds may never need long-term care support, 20 percent will need it for longer than five years.
Now that you are convinced of the importance of long-term care insurance (and I hope you are), there are a few things to consider when buying it:
Purchase it with your partner. Insurance companies offer discounts to couples who are married or living together. You could save up to 30 percent.
Consider shared care. You can purchase a feature that allows couples to share the benefits of each other’s policies. For example: If Mr. and Mrs. Smith each buy $200,000 in benefits and Mr. Smith needs long-term care, he can use all of his $200,000 and then tap into Mrs. Smith’s policy, which, if she hasn’t used it yet, could provide another $200,000 in benefits.
Don’t forget inflation coverage. Long-term care insurance has its own inflation rate, and it typically rises faster than the national inflation rate.
Shop around. If you’re like most people, you don’t even know what coverage looks like. Check to see what your monthly benefits would be, and how they compare to the costs of long-term care in your area.
Buy before your birthday. Long-term care insurance rates are based on your age. You’ll save money if you buy before your next birthday.
Learn about any possible tax write-offs. If you are a business owner, or have high healthcare costs, your long-term care insurance premiums may be tax deductible.
Talk with a professional. Long-term care insurance is complex. There are hundreds if not thousands of different kinds of long-term care policies offered by different insurance companies. I suggest you consult with an expert to find the right policy for you.
I strongly advise that you investigate the merits of a policy. Consider it portfolio insurance; after all, you’re protecting your finances from potentially devastating damage.
© 2018 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC
Call for more information
For unbiased advice on long-term care insurance as well as Medicare, contact your closest insurance counseling office:
SHIP (State Health Insurance Assistance Program):
Montgomery County: (301) 255-4250
Prince George’s County: (301)
VICAP (Virginia Insurance Counseling and Assistance Program)
Arlington: (703) 228-1700
Alexandria: (703) 746-5999
Fairfax: (703) 324-5851
In Washington, D.C.
George Washington University Health Insurance Counseling Project: (202) 994-6272