Do You Need Long Term Care Insurance?
As millions of baby boomers reach or approach retirement age, the topic of retirement insurance comes up a lot. Most of the conversation centers around retirement health insurance, like Medicare supplements and Medicare Advantage plans Surprisingly, the topic of long term care insurance (LTCi) seems ignored.
Why Do Retirement Planners Ignore Long Term Care Insurance Needs?
I truly believe there are three main reasons that nursing care insurance has not gained much traction.
- It seems like another expense to cover something that may never happen, or at worst, will happen in a long time.
- Right now, LTCi plans have no standardization like, for example, Medicare supplements have. This makes policies confusing. It is hard to really know if one plan or another gives a consumer the best value for their investment.
- Many people have the mistaken belief that some other health plan, they already have, will take care of this need. Medicare, and associated health plans, only cover short term needs. Yes, Medicaid does cover nursing care, but that is only true if a person qualifies. Most of the time, in order to qualify, you have to spend down most of your assets. Some states now have long term care insurance partnerships that will relax these rules, but only for people who have purchased qualified long term care insurance policies!
Why Compare Long Term Care Insurance And Alternatives?
Some people figure they will just save some money to be able to handle nursing home expenses. Do you really know how much nursing care costs today, how much the cost has risen, and how much it is expected to rise in the future. If you are 60 years old now, you would be prudent to assume that nursing costs will rise by the time you are 80 years old – and may need nursing care.
Today’s Nursing Care Costs
Nursing Care Costs By Type
Refer to the info graphic, we have included here, to get an idea of how much different types of nursing care costs. This graphic comes from a Met Life Survey, and it includes nursing homes, assisted living, and home health care.
Of course, nursing homes are most expensive, assisted living falls in the middle, and home health care seems a bit cheaper. But this is not like a menu at a restaurant. You cannot predict the type of nursing care you will actually require.
Right now, you may say you would prefer to live at home with some assistance from a home health aid who drops in on you from time to time. But in the future, your doctor and family may decide you need more than that to stay safe. At today’s cost, how long would it take the yearly expenses of $70,000+ eat up your savings?
And yes again, Medicaid will start picking up the tab after you run out of money, but that is not the idea way to spend all of your assets. So, my friends, that is the argument for long term care insurance. Again, many states have passed LTCi partnership rules which make it much easier to qualify for Medicaid, without spending down all of your money, if you have already signed up for a qualified LTCi insurance plan.
Are There Viable Long Term Care Insurance Alternatives?
There are alternatives to buying a nursing home policy. You may want to follow this link to review some alternatives to long term care insurance. These do include saving money, using other types of insurance policies with nursing care riders, or just figuring Medicaid will take over after you have spent your savings.
You can use our form to get free long term care insurance quotes if you are interested in researching your options.