Learn 4 Questions To Help You Decide If Long-Term Care Insurance Is Right For You

It is estimated that two-thirds or more of people over the age of 65 will require long-term care at some point.


What is frequently overlooked is that more than half of those in need of care will require it for less than three months, which happens to be the period before most long-term care insurance coverage comes in. Furthermore, the average length of stay in a long-term care institution is one to one and a half years – greater for women, shorter for males. This should mitigate the chance of depleting all of your assets. Furthermore, simply because you seek LTC insurance does not mean you will qualify. There’s a danger that insurance companies won’t take a chance on you, especially if your family has a history of early-onset dementia, cardiovascular disease, or diabetes.

However, if protecting your estate is important to you and the thought of losing everything keeps you awake at night, you might consider obtaining long-term care insurance. The first decision you must make is which company to work for. While there are thousands of insurance firms in the United States, not all provide long-term care insurance. As a result, choosing the right insurance company and coverage becomes difficult. Because you are effectively acquiring a promise to pay a claim in the future, the business you choose may be more significant than the policy itself.

Purchasing long-term care insurance is a risk-management exercise. It all comes down to how you answer the following four questions:

Would a devastating occurrence (for example, becoming crippled and requiring long-term care) overwhelm and drain everything you own?


What is the likelihood of you requiring long-term care based on your family history?

Do you have enough retirement assets and income to cover the full cost of long-term care?

Do you mind lowering your estate if you need long-term care?

Your response will determine if long-term care insurance is appropriate for you. According to a LifePlans, Inc. poll, over two-thirds of people who purchase LTC insurance do so to prevent reliance on others (69%), protect their assets (67%), make long-term care services affordable (66%), or maintain their level of living (59 percent )

How to Choose the Best Policy

Step 1: Determine your requirement.

Determine the average yearly nursing care costs in your location, then deduct fixed income sources (Social Security or pensions) and income streams coming from your assets. If there is still a shortfall, long-term care insurance might be considered.

As an example, the annual cost of nursing home care is $100,000. Fixed income sources (such as Social Security, pensions, and so on) are accessible for $50,000 per year. The nest egg is worth $500,000. Assuming a 5% return, an additional $25,000 per year becomes available.