Is Long Term Care Insurance Worth It?

Meta: It isn’t easy to decide on a long term care insurance because there are many factors to consider. Read this article and find out if it’s worth buying or not!


Introduction

When it comes to buying long term care insurance, the decision is totally up to you. Due to the excessively high costs and complexity, most people have chosen to avoid this type of long term care insurance. However, to shed some light on it, this article will show you some of its pros and cons to see if long term care insurance is really worth it.

Is Long Term Care Insurance Important or Not?

You’ll eventually get old to the point that you need some kind of support in your life. It would be no longer possible for you to do the cooking, shopping, cleaning, etc. by yourself, so you have to hire someone to do it or you would have to go for assisted living or home care, instead. All of these will cost you pretty much and the cost would keep increasing as the general inflation rate rises.

Before it’s too late, you should be aware that long term care insurance can help you cover living costs. A home insurance can protect your home in case of any potential damage, while an auto insurance can cover you when an accident occurs or you have an injury.

There are many options for you to choose from, so you can take your time. The annual premium may double from $2,000 to $4,000 and it might seem overwhelming, but the average annual fee of home assistance in 2017 was approximately $50,000. You can save so much more with an LTCi and it is also highly valuable.

If you find it too difficult to rack up your budget to afford the premiums, you should speak to your children who are already adults to help you cover the LTCi. This will benefit not only you but also your children because they might have to pay for your care eventually with their own money which can cost more than the current premiums.
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It’s advised that you do your LTCi research beforehand once you turn 50, the eligible age for an LTC. Despite of being rare, it’s safe and wise to purchase an LTCi that you can still tolerate even when the annual premium doubles.

So, is long term care insurance really worth it? The answer is YES!

Pros and Cons of Long Term Care Insurance

Although long term care insurance is important, it has some drawbacks that you should take into account for the best buying decision. To know more about this kind of insurance, let’s take a look at some of its advantages and disadvantages:

Pros

Long-Term Care Puts You at Ease

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If you’re always worrying about the future and you’ve purchased the long term care insurance, you can take it easy knowing that the insurance got you covered. Therefore, as you age, you would still have money covered for you and your family for assisted living or home care services.

If You’re Certain that You’ll Need It, Long-Term Care is Gratifying

When you want to make a decision on which type of insurance to purchase, it’s vital to consider the long term care insurance as one of the options. The future won’t be a hundred percent precise as you predicted, but if you really need it, the long term insurance really helps.

Flexibility

The LTCi allows you to change the policy in accordance with your needs and ability to pay. The amount of coverage and benefit terms is up for you to decide. If you can’t afford the premium, the company should give you a choice to reduce the premium by cutting down the amount of coverage.

Cons

Prices Aren’t Fixed

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The most concerning problem with the long term insurance is the price. Considering that it’s newly established, it’s hard to tell how much this type of insurance will cost in the future due to its wide variety and inflation rate. So not only is it uncertain, but it is also expensive with an average annual premium of $3,000 to $6,000 depending on your age, sex, health, etc.

You’re Unsure of How Much Coverage You’ll Need

Regardless of the price, you must first need to decide how much insurance you need and want. This is also a vague factor since you won’t know if anything will happen to you and the insurance might never be enough even when it guarantees $300,000 in benefits. On the other hand, you might not even need all of the benefits which you purchased.

Difficult Underwriting

You’ll get rejected by insurance companies if you appear a little unhealthy or over 60 years old. For example, an old woman who seems perfectly healthy will be accepted, while an old man with a history of back and neck pains will be rejected.

When Should You Buy Long Term Care Insurance?

If you find yourself in these situations, getting a long term care insurance is the best idea:

1. You own a small business: The business will pay for you the insurance and you get major tax benefits when choosing the LTCi.

2. You pay 10 years in advance: If you’re too concerned about the increase rate, then doing a 10-pay can give you the peace of mind. Although the cost will be greatly higher compared to normal, you won’t have to worry about future rates for the next 10 years. This method is also suited for small business owners since you have paid off the policy for the next 10 years, while still doing business.

Conclusion

It isn’t easy to decide on a long term care insurance. Consult your financial advisor to discuss the problem and find out the best option for you. The policy might be worth keeping, but you should hope for the best and prepare for the worst.

Depending on your budget, you and your family’s health, and the insurance company, you should think carefully and pay attention when making a decision.

Some say it’s a waste of money and time, but some say they don’t know what to do without it. In the end, it’s up to you to make the decision and see if long term care insurance is worth it or not.


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