Long-term care (LTC) refers to a broad spectrum of services that assist an elder with daily activities, such as eating, bathing or running errands. Most people don’t realize that these essential services aren’t covered by health insurance, disability insurance or Medicare when they need them. In some instances, Medicaid may cover the cost of LTC, but to qualify, your income and assets can’t exceed the levels set in New York.
Too often, individuals and families are left scrambling to come up with the money for LTC, leaving them in financial ruin. When it comes to purchasing long-term care insurance, planning early pays off. If you wait too long, providers can deny you coverage due to your age or existing health conditions. Premiums are also higher the older you are when you apply, so the ideal age to purchase LTC insurance is between 55 and 65.
Considering 56% of Americans between 57 and 61 will spend time in a nursing home during their lifetime, LTC insurance is a good idea for ensuring financial security later in life. If you are ready to start planning ahead for your future needs, experts recommend the following tips for your LTC plan:
1. Consider your needs
It’s essential to consider your unique circumstances and needs when creating your LTC plan. For example, do you have a family history of illnesses such as Alzheimer’s that may eventually require special care? Do you have close relatives that could provide informal care for you in the event you need it, or do they live out of state or have their own financial problems?
2. Consider the costs
While no one can predict whether they will need LTC or how long they will need it, the U.S. Department of Health and Services states the average woman will need 3.7 years of care and the average man will need 2.2 years. Nursing homes and assisted care facilities can cost thousands of dollars a month, so it’s essential to keep these numbers in mind when planning for your future.
3. Buy what you can afford
When it comes to LTC insurance, some coverage is generally better than no coverage if you need it. While the cost of LTC policies and terms varies, the average long-term care coverage costs about $2,700 per year, depending on the policy holder’s age.
4. Keep your goals in mind
Many people worry that if they purchase LTC insurance, they’ll be wasting their money on something they’ll never use. However, there are many options when it comes to LTC planning. For example, some hybrid policies combine life insurance with LTC insurance, so if you don’t use it, your beneficiaries will receive a higher benefit.
It’s critical not to overlook LTC planning. Starting your preparation early will ensure that you have coverage no matter what happens later in life.