As medicine has advanced over the past several decades, lifespans have happily increased, and people are living longer, healthier lives well into retirement. However, one downside as people age further and further is the need for skilled, long-term care. Long-term care is extremely expensive – in some cases, it may cost more than $10,000 a month for a senior citizen in a nursing home. Long-term care insurance was created to help defray the costs of long-term care, but there are many things to consider before buying this type of insurance.
One of the most common marketing messages associated with long-term care insurance is that it provides protection against the high costs of skilled nursing facilities and other long-term care centers. Unfortunately, long-term care insurance policies often come attached with many restrictions and requirements, and typically only cover a limited amount of long-term care costs. Even worse, this protection may amount to less than what you’ve spent paying for insurance premiums over the years.
Another consideration to keep in mind is that most long-term care facility stays only last six months or less, which is much less than long-term care insurance companies would have you believe. Many policies will not cover assisted living facilities either, even though seniors usually stay at those types of facilities much longer than nursing homes. And perhaps the most disconcerting fact about long-term care insurance is that many seniors cannot afford to make premium payments farther along into their retirement years – which is usually around the time when they would require long-term care.
There are situations when it would pay to have long-term care insurance. The majority of financial experts agree that paying long-term care insurance premiums is a good idea as long as the premiums only amount to 5% or less of your monthly income. However, they also stress that your income will drop and premiums will rise as you age, which should be taken into consideration. If you’re considering buying a long-term care insurance policy because you think it is a sound financial investment, it’s important to first consult with an experienced elder law attorney in conjunction with a financial advisor who can review your individual situation and advise whether long-term care insurance is in fact a good investment. There may be additional policies, such as hybrid Long-Term Care Insurance products, that your attorney may suggest to meet your unique needs.
If you would like to get more information on long-term care insurance, or if you’d like to have your current long-term care insurance policy reviewed to make sure it still fits with your situation, please set up an appointment at our San Fernando Valley elder law office by calling (818) 905-6088.