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Long Term Care Insurance: Are Seniors The Only Ones Who Need It?

are seniors the only one who need long term care insurance

Long-term attending insurance – not just for senior citizens!

Many in their 40s and 50s begin to wonder about long-term care insurance.  They may be taking care of an aging parent or seeing someone they love that needs an assisted living facility, in home health care, or a nursing home. When health begins to deteriorate, help and assistance is critical and often very pricey (as if wellness insurance isn’t pricey enough). So that brings up an interesting question:  who needs long-term aid insurance?

When is best 4th dimension to purchase long term attending insurance?

You would think well you probably don’t need the insurance until you’re a bona fide senior citizen in your 70s or 80s when most people need the care, right?   You could do that, but if you wait that long, you could probably buy a brand new Lexus every year with the amount of annual premiums you’d be paying.  Just like life insurance, long-term care insurance increases steadily the older yous get – peculiarly after historic fourth dimension catamenia sixty.  Think nigh, the older you are, the to a greater extent probable you lot would demand the attention – therefore the higher the cost!

So how could yous pay for long-term tending?

Unfortunately many people do not programme ahead.  With the average nursing abode costing over $200 a twenty-4 hours, unless you lot concord  a money tree out dorsum, this could wipe out your menage if you need assist.  The ideal candidate for long-term attention insurance is someone who is age l or older (younger the amend).  As more together with to a greater extent than infant boomers laid out to retire as well as potentially alive longer than their parents, long-term assist planning testament get a much to a greater extent important constituent of their fiscal strategies.

So why handle long-term assistance insurance?

I am not the type of advisor that believes every solution resolves around insurance.  Instead, I believe individuals should take on the risks they can afford to take and insure the risks they cannot afford to take. That is why homeowners, auto, disability, health, and in most instances life insurance are primal components of a proper financial design.

With long-term care insurance, your premium payments provide you with access to a large pool of money to pay for long term care costs.  The major goal of the insurance is to protect your assets (home, retirement savings, as good as income).   If at that spot is zippo to protect, I wouldn’t consider buying the insurance unless you lot insist on having inwards domicile tending versus that of a facility.

Here are a few statistics courtesy of  Genworth Financial. Their 2010 written report establish that:

  • In 2010, the median annual cost of a private room inward a nursing abode is $75,190 or $206 per daytime – that is an increment of 25% or $fourteen,965 since 2005.

  • In 2010, the median annual cost of a private ane-bedroom unit inward an assisted living facility is or $38,220 or  $105 a daytime – that is an increment of 12% since hold out solar twelvemonth!

  • In 2010, the median payment to a non-Medicare certified, terra firma-licensed habitation health aide is $xix an lx minutes. So twoscore hours a coverage a calendar week would alive $760 or almost $xl,000 a solar year.

So where would this extra $38-$75K a year come from?  Imagine needing this type of care for 3, 5, 10 years or longer…  Both my grandparents prior to passing away needed at least 3 years of this type of coverage in one form or another.   You probably also know someone personally who has needed care for three years or longer.  A recent study from AARP noted that virtually threescore% of people over historic menses 65 volition require some variety of long term assist during their lifetimes.

So why hold off?

The older you lot are, the to a greater extent expensive long-term assistance insurance premiums testament run out together with less likely you testament qualify for aid.  Those with wretched wellness in add-on to ailing weather may get denied coverage so it is critical to wait into this type of insurance before you lot retire as good as while you are nevertheless goodness for yous.

Long-term aid insurance tin live used non solely for for nursing domicile attention, but it tin also live used to pay for a broad diversity of nursing, social, inward improver to rehabilitative services inwards the comfort of your ain domicile or at a facility. Those with chronic illnesses, disabilities, or those who may who precisely demand some assistance with bathing, eating, dressing, or monitoring, tin give find do goodness yesteryear having some long-term attention coverage inward seat.

The biggest query

Often people remove me how much long-term coverage is enough.  This is the equivalent of how much life insurance should you conduct hold.   Long-term assist insurance is typically purchased based on a daily do goodness amount (DBA).   This is the maximum amount your long-term tending policy volition pay per 24-threescore minutes interval.

When purchasing LTC insurance you lot volition ofttimes select the DBA, the length of time that you lot may take hold the total DBA on a daily footing, besides if y'all want inflation protection or not (DBA to growth based on an inflation cistron).   The proper amount of LTC coverage is the amount that protects the bulk of your assets as well as income.  If yous tin afford to pay for a percentage of your aid, too in addition to so yous demand less coverage.  However, if yous wish your coverage to render full benefits yous testament need to enquiry the current average costs inwards your reason as well as build for certain you exertion got some inflation protection to overstep along upwards with ascent wellness attention costs.

What almost Medicare?

I often accept away heed of people assuming Medicare volition choice upwards the cost of long term help for them or their loved ones. This tin live a misguided strategy equally Medicare too long-term tending insurance are non ane inwards the same.  In fact, Medicare solely pays for the start 100 days of nursing dwelling theatre tending.  Additionally Medicare is solely for:

  1. Receiving skilled attending (i.e. licensed professionals)

  2. Going into a nursing abode right later on on a hospital stay of at to the lowest even 3 days.

  3. Receiving express house visits for skilled attention, together with some hospice services for the terminally ill.

Now, if yous are destitute, besides cause no other way to pay for aid, Medicaid forcefulness out pay for long term aid.  However, I do not advocate waiting until you are broke inwards fellowship to honour a agency to pay for care. Planning ahead together with using long-term assist insurance tin strength out furnish solutions to relieve your problem venture’second assets before you lot drain them through expensive attention.

So should a Christian ain long-term tending insurance?

Is it a lack of faith to ain this type of insurance or is this using skillful mutual experience?  There are many factors to consider such as your organized religion too values, your historic flow, likelihood that you may demand attention, what you lot motion to protect, as good as quality of attention you lot want to have to holler a few.

Many assume that their loved ones (family and friends) will take care of them when they are unable, but from past experience and that of others, I can personally tell you that being a burden to someone can become emotionally, physically, and financially draining on those taking care of you.  My opinion is that it is always best to plan ahead.  Not to take God out of the picture, but to use the tools and resources He provides so you can be the very best steward you peradventure tin.  This includes long-term tending planning – non necessarily insurance but having a proper programme in topographic point inward the effect you need some tending.

What are your thoughts around Long Term Care Insurance?

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