Should I buy long-term care insurance?

If you need long-term care services and have to pay to obtain them, what financial resources could you call on? Do you have enough to pay for four or more years in a nursing home, an assisted living facility, or home health care?

If you’re over 65, don’t rely on Medicare or private health insurance. Medicare doesn’t pay for custodial care, and private health insurance rarely pays any of the cost of long-term care.

If you expect to have very little money when you need long-term care services, you might qualify for Medicaid, a government program that pays the medical and long-term care expenses of poor people. If you expect to be in that situation, you may not need to buy long-term care insurance, because your state’s Medicaid program may pay your long-term care expenses. Buying long-term care insurance may only save the state—not you—money. Although this may change, the exception is if you live in California, Connecticut, Indiana, or New York, states that have a Partnership for Long-Term Care program. For residents of these four states, buying long-term care insurance does offer an additional benefit.

If you expect to have a lot of money when you need long-term care services, you still may prefer to pay your long-term care expenses with long-term care insurance. However, you could plan to pay for the care “out of pocket”—that is, as a regular expense.

If you fall in-between these two categories, owning long-term care insurance, like all other insurance coverages, offers peace-of-mind benefits as well as financial ones. For example, a recent survey of people age 50 and over asked how confident they were that they could pay for long-term care services if they needed them. Among those with long-term care policies, 52 percent said they were very confident and another 40 percent said they were somewhat confident. Among those who didn’t own a long-term care policy, only 8 percent were very confident and only 27 percent were somewhat confident.

But if you’re under 85--you shouldn't ignore the topic of long-term care insurance because

• You might already be unable to buy long-term care insurance. Wakely Consulting Group, an actuarial firm, studied applicants for long-term care insurance in 2003-2004; the findings: 11 percent of applicants in their 50s, 19 percent in their 60s and 43 percent in their 70s were rejected.
• A Milliman & Robertson actuary estimated that 15 to 25 percent of the over-65 age group are uninsurable for long-term care.
• 70% of those over 65 will need long term care services in their lifetime based on a Genworth 2014 survey.
• 40% of adults in the United States require long term care before the age of 65 based on a Genworth 2014 study.

So, unless you have so little money that you will qualify for Medicaid, you should consider buying long-term care insurance. Even if you have so much money that you can pay the bills out of your own pocket, you still may want to consider buying long-term care insurance instead of paying the cost of long-term care out of savings, investments, or income

Fox Insurance Agency

At Fox Insurance Agency, we proudly serve Beaverton, Portland, and all of Oregon, and Washington. Whatever your needs, we would be happy to help you find just the right policy to meet them. As an independent agency, we are able to provide quotes from more than one insurance company. We work only with highly recognizable, reputable insurers.

If you are interested in a long-term care insurance quote or policy contact us today. We would be happy to help you find the right policy for you and your family!

The information in this article was obtained from various sources and is not all inclusive regarding the subject matter. This content is offered for educational purposes only and does not represent contractual agreements, nor is it intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied. Content provided by Insurance Information Institute.