How Important is Long-Term Care Insurance?
You get health insurance to finance final expenses and protect your family from financial hardship in the case of your death. But what many people don’t consider is the immense cost that you and your family could be burdened with if you need long-term care for an illness or disability that requires daily care.
Not everyone will need long-term care when they get older. However, most people who live a long life will eventually require some sort of caregiving, and these services can be expensive. Long-term care includes in-home caregivers, nursing homes, assisted living residences, etc. Because of the high costs associated with daily/overnight care (up to hundreds of dollars a day), getting long-term care insurance could help alleviate the future financial burden on you and your family.
How Much Does Long-term Care Insurance Cost?
The cost of insurance premiums varies depending on many factors, just like any other kind of insurance. One important factor is your personal health. The first health factor is age. The older you are, the more expensive long-term care insurance is, as the likelihood that you will need such care increases. While generally people start thinking about and paying for long-term care insurance when they’re closer to the time that they need it, starting to pay for it early will help you pay less in the long run. Any present illnesses or health risk factors (such as smoking) will increase your premium because they also increase the odds that you’ll need the insurance.
Additionally, premiums can also be affected by the type of service you want to cover. For instance, you can choose policies that will specifically pay for one type of long-term care. Nursing homes and living residences are more expensive than in-home care, and the premiums will be higher as well. Alternatively, flexible policies can be purchased that you can use for any type of care you choose.
A third factor is location. Where do you plan on living post-retirement? The cost of a room at a nursing home or the hourly cost of in-home care can vary greatly depending on where you live. For instance, just about any type of service in New York City tends to cost significantly more than the rates in other parts of the country. There are plenty of ways to calculate the differences in long-term care costs for your area, including going through the AARP website or asking an insurance provider.
Should I Get It?
Obviously, there is a lot of speculation involved in determining how important long-term care will be for you 10, 20, or even 30 years down the road. Think about who would be able to take care of you in the event that you needed daily care; will you have sons and daughters who will be able to care for you? Are you single or married, and if you’re single, do you anticipate staying single? For a number of reasons, especially their likelihood to live longer, women are far more likely to require long-term care than men. Family can help offset a part of the costs if you can move in with them or if they live in close proximity and can provide basic support and assistance. But when you need a nurse or doctor, you will incur other expenses.
You should also consider your family history when determining your need for long-term care insurance. For instance, if your family has certain genetic predispositions that require long-term care, such as Alzheimer’s, dementia, other cognitive impairments, and diabetes—the odds that you will need such care increases.
For anyone who lives a long life, long-term care insurance is very important for ensuring your later years are as comfortable as possible. The costs without insurance can be sky-high, and Medicare, Medicaid, and most health insurance plans only pay for a limited portion, if any, of the expenses for long-term care. Therefore, as long as you have enough money to pay the premium, long-term care insurance can be important for just about anybody to invest in.