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What is Long Term Care Insurance?
When an individual suffers a long term physical illness, a disability or a cognitive impairment, like Alzheimer’s disease, he or she often needs long-term care. This type of care might be different from one person to another. For some, it might mean a prolonged or permanent stay in a skilled nursing facility, assisted living facility or adult day care center. For others, they might prefer hiring a care-giver at home.
Mortality tables have been improving. New medical treatments have been prolonging people’s lives. As a result, the cost of long term care can be our greatest financial risk during our senior years. The costs can be devastating for our families. The monthly cost in a skilled nursing facility could be $50,000 or more per year and home care providers could be even more. If your nest egg is $300,000, as an example, you could eat up this money quickly during an extended long term illness.
Who Needs It?
People who generally have a liquid net worth of $250,000 to $2,000,000, purchase this type of insurance. People with a lower net worth, generally expect the state to take care of them. People with higher net worth, generally have the funds to pay for their own long term care.
Here are some important issues of long term care policies?
- How do I qualify for benefits?
- Tax qualified vs non-tax qualified plans
- Does the policy keep up with inflation?
- How much coverage do I need
- What is not covered?
- How do I judge the strength of the insurance company?
- Are premiums guaranteed?
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Articles coming soon
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