Is Long-Term Care Insurance Right for You?

As we age, the possibility of needing assistance with daily activities becomes a reality for many. Long-term care insurance (LTCI) is one way to prepare for such needs, providing financial support for services like home care, assisted living, or nursing home care. Let’s explore what LTCI is, its pros and cons, tips for selecting the right policy, and when and where to get it.

Long-term care insurance is a policy designed to cover costs associated with extended care services not covered by health insurance, Medicare, or Medicaid. These services might include assistance with activities of daily living such as bathing, dressing, and eating, or specialized care for conditions like dementia, Alzheimer’s or Parkinson’s disease.

LTCI is a good idea for many reasons, although it may not be the right fit for everyone.

LTCI can help protect your savings and assets from being depleted by long-term care costs, which can quickly add up. Policies often allow you to choose between receiving care at home, in an assisted living facility, or a nursing home which provides flexibility. LTCI means you have coverage and your loved ones won’t need to shoulder the financial or caregiving responsibilities alone, relieving the family burden. It can also provide benefits before Medicaid eligibility kicks in, offering higher quality care options.

On the other hand, LTCI premiums can be expensive, and they’re not guaranteed to stay the same over time. Further, if you never need long-term care, the money paid into the policy doesn’t get paid back to you or loved ones. Some policies also require a health screening, and pre-existing conditions may lead to denial or higher premiums. LTCI policies are often complex, and understanding the terms, conditions and exclusions can be challenging and require careful attention.

If you’re considering getting LTCI, the best time to buy is in your mid-50s to early 60s. This typically involves lower premiums and higher likelihood to qualify based on health. Waiting until you’re older, or your health declines can result in significantly higher costs, or even denial of coverage altogether.

If you are interested in LTCI be sure to consult with your estate planning attorney and your financial advisor. Your estate planning attorney can review your life circumstances and perhaps offer alternatives such as early trust planning or other strategies.

If LTCI is the right choice for you, you may work with a major insurance company or a trusted financial advisor to help find the best policy to fit your needs. If you’re still employed, some employers offer LTCI as part of their benefits package, often at discounted rates. There are even online platforms that allow you to compare policies and premiums to select the right policy.

By understanding the ins and outs of long-term care insurance, you can make informed decisions that align with your financial and personal needs. Start exploring options early to secure the most favorable terms and ensure you’re prepared for whatever the future holds.