Long term care is a growing problem in the United States. We have older individuals dipping into their nest eggs trying to contend with the high costs of care services. We see the elderly trying to find other means to support their needs because they have already outlived their savings. Access to long term care is no longer easy, and this is the reality that many of the older generations are facing.
Younger generations have always been advised to start planning as early as they can, and this has become more urgent now more than ever. The costs of care are rising, and individuals need to look into coverage that best suits their needs.
Many have chosen long term care insurance as a means to secure their future, and they were not disappointed. In a study done by LifePlans, they discovered that 94-percent of long term care insurance policyholders are satisfied with the benefits paid by their policy. According to these individuals, their policies are sufficient in providing for their current care needs. With all the news concerning the elderly and their care needs, this is the kind of peace of mind in growing old and needing care that many individuals dream of.
However, it would not be wise to purchase a policy without understanding what it is, what it does, and how it works. To help people in planning for their future, we have gathered nine of the often-asked question about long term care insurance, and have addressed them accordingly.
To Purchase A Policy or Not
1. What are the chances that I will need it?
This depends on certain observed factors such as gender and family medical history. Putting aside financial stability for a moment, let’s say that the individual can afford the policy; it does not change the fact that we will all grow older and become dependent soon.
On top of that, women have been observed to live longer than men. This makes coverage more important because, without it, they risk facing higher costs and a majority of them have to do so without the aid of a partner.
People who have an identified health concerns in their families, especially age-related conditions, are also suggested to purchase a policy because they have a higher chance of needing it.
2. Without an insurance policy, how is care paid for?
Care is paid out-of-pocket if there is no insurance policy to cover the costs.
Yes, Medicare can provide for a portion of costs of long term care, but mostly if the individual is recovering from a severe condition such as a stroke or from a surgery. Plus, Medicare will only provide coverage for a limited time. Additionally, Medicaid is good if you can qualify. However, their assets cannot exceed the federal poverty level set in most states. Using Medicare or Medicaid can be beneficial, but it might be too risky for individuals who have assets and funds that they would like to protect.
3. Are there specified groups of people who need insurance most?
Everyone can qualify for coverage, but those who live alone or have no children benefit from a policy greatly. These are the ones less likely to rely on family members for the care and support that need. Through a policy, they get to grow old feeling secured that their needs will be covered.
This is not to say that married individuals should not look into buying a policy. Having one would also benefit them because it acts as a shield for the assets meant for their family.
4. When’s the best time to buy a policy?
The commonly suggested age range to buy a policy is around late 40s up to the late 50s because of the premiums. A policy may cost $5,000 to a 50-year-old buyer, but it could cost $6,500 to someone age 58 to 60. The longer you wait to buy a policy, the higher the premiums will be.
Another consideration is the risk of not qualifying because of age. The chances of qualifying for a policy becomes lower as you age. Buying as early as you can may prove beneficial since it entitles you to lower premiums with higher chances of getting qualified.
Let’s Talk about the Policy Details
5. Is inflation protection necessary?
Yes, it is necessary.
Keep in mind that you are purchasing a policy that you will not need for a few more decades. This means that the costs will vary immensely from the time that you purchase to the time that you need it. Inflation protection will allow your policy to make room for the costs of care during the time that you require the services.
6. What must I know about the insurer?
The quality of their service and their stability—these are two of the main concerns that you must look into before purchasing a policy from a provider. Look into their ratings and read customer reviews. Check their rates, as well, compared to those of other companies. You can only do so by requesting quotes from various long term care insurance companies.
These will show you how capable a company is in providing for the care that you need decades from now.