Few Seniors Prepared for the Cost of Long Term Care
When we plan for our futures, we tend to focus on certain things: our future car, our future house, our future job. Something not usually included in that planning is our future health care, though with the rising cost of medical services, it should be at the top of the list.
Don’t Wait to Plan
Our refusal to plan isn’t theoretical; it’s reflected in data year after year. Despite the fact that we all grow old and 50% of Americans will need long term care at some point, only 10% of seniors currently have a long term care insurance policy. The high cost of long term care makes this type of planning even more important as we age.
It’s true that long term care insurance isn’t for every one, and some people already know that their lack of assets will allow them to qualify for Medicaid. Still, though, many people who stand to benefit from long term care insurance pass up on buying a policy because they are under the impression that it isn’t right for them.
Those who can afford to pay long term care insurance premiums usually stand to lose a substantial amount of financial assets if faced with medical bills. People who have worked their whole lives to establish a secure retirement nest egg are often shocked when they suffer from a fall and are forced to pay for long term care services out of pocket. The cost of long term care for even just a year quickly take a heavy toll on your savings, which is why long term care insurance is becoming a more widely known product for retirement portfolios. Still, though, not enough people are planning ahead.
Start the Process
Premiums have risen lately in order to align with climbing health care costs, but as providers learn to underwrite more effectively, the threat of huge rate hikes decreases. Even with the increased rates, the benefits offered by the policies makes the plans extremely valuable. Though there is a chance, like with any type of insurance, that you will never make a claim, if you do, the premiums pale in comparison to the claims payments. The biggest long term care claims payout is currently at more than $1.8 million, and the industry pays out more than $11 million a day.
Though a claim that large isn’t typical, the chance that you may need to make a claim is. Odds are, you know someone who has needed long term care during their lives, whether it was in a nursing home, assisted living facility, or in a private home. Figuring out how to pay for care can be stressful and if, like most people, you can’t afford to shell out $50,000 or $100,000 a year, unpaid care from a family caregiver may be your only option, which is often emotionally exhausting on a family.
Knowing whether long term care insurance is right for you isn’t tricky. If you have less than $50,000 in assets or are in poor health, a policy likely isn’t a smart investment. If you have more in assets, however, and have spent a long time building up your nest egg, a long term care insurance policy can provide you with the asset protection you need from the high cost of long term care, allowing you to be successful in retirement.
Choosing the right policy and benefit levels is important to keeping your rates affordable, so be sure to work with an independent agent who can help you shop the market. Comparing multiple companies is the best way to get lower rates and the specific benefits that are right for your financial and health needs.