Money Talks....
Thanks for joining us on this issue of Money Talks….we continue our series today with “You don’t know what you don’t know.” Today we talk about Long Term Care Insurance. There are approximately 12,000 people a day turning 65. One in Two will need some type of care. Things you should consider
Long-term care insurance helps cover the costs of long-term care services when you have a chronic medical condition, disability, or disorder. It covers care generally not covered by regular health insurance, Medicare, or Medicaid.
What Long-Term Care Insurance Covers:
Home health care
Assisted living facilities
Nursing homes
Adult day care centers
Hospice care
Care coordination
Types of Long-Term Care Insurance Policies:
Traditional (Standalone) Long-Term Care Insurance: Designed solely for long-term care expenses. Benefits are triggered when you can no longer perform a certain number of Activities of Daily Living (ADLs) without help or develop cognitive impairment.
Hybrid (Linked-Benefit) Long-Term Care Insurance: Combines long-term care coverage with life insurance or an annuity. If you don't use the long-term care benefits, the remaining death benefit or annuity value is paid out.
Long-Term Care Insurance Riders: Added to an existing life insurance policy or annuity to accelerate the death benefit or access the annuity's value for long-term care costs.
Cost of Long-Term Care Insurance:
The cost depends on factors like:
Age: Younger applicants typically have lower premiums.
Health: Good health qualifies for better rates.
Coverage Amount and Duration: Higher benefits and longer periods increase costs.
Elimination Period: A longer waiting period before benefits start lowers premiums.
Inflation Protection: Adding this increases premiums but helps maintain the benefit's value over time.
Gender: Women often pay more due to longer life expectancies.
Marital Status: Couples may receive discounts.
Insurance Carrier and Location: Rates vary by company and geographic area.
In early 2025, a 55-year-old man might pay around $2,075 per year for a policy with an initial benefit pool of $165,000, growing with a 3% annual increase. A 55-year-old woman might pay around $3,700 for the same coverage.
When to Buy Long-Term Care Insurance:
The ideal time is generally in your mid-50s to mid-60s for lower premiums and better health qualification chances. Waiting longer increases costs and the risk of denial.
Important Considerations:
Understand the Policy: Review benefits, limitations, exclusions, and waiting periods.
Inflation Protection: Strongly consider this due to rising care costs.
Financial Stability of the Insurer: Choose a reputable company.
Shop Around: Compare quotes from multiple insurers.
Work with a Professional: A financial advisor can help assess your needs.
If you ever been affected by a family member that needed this type of care you know first hand the challenges. Contact us today for a quote.
Until next time,
Diane