Is Long Term Care Insurance Worth It? 5 Important Considerations

Solera - Is Long Term Care Insurance Worth It
22 Aug 2018
When it comes to protecting your assets, insurance is usually an important element of any solid plan. After thinking about your needs, however, you may have found yourself asking: “Is long-term care insurance worth it?” Here are five important considerations to help you decide.

70% of Americans who reach the age of 65 will require some form of long-term care in their near future.

With this statistic in mind, it seems only natural to take out a long-term care insurance plan. But the question on most people’s minds is: is long-term care insurance worth it?

Many people argue that long-term care insurance eats up thousands of Dollars before you really need it, so where’s the sense in that?

Before committing to something such as long-term care insurance, there are few important considerations to keep in mind. Find out more in this blog…

What is Long-Term Care Insurance?

In a nutshell, long-term care insurance is a policy designed to cover your needs as you age. More specifically, this insurance plan covers the costs associated with nursing homes, skilled care, medications and spousal care.

Along with this, it’s also aimed at protecting your assets and your estate. This insurance plan works to ensure your legacy is inherited appropriately.

As is the nature of insurance policies, you will need to purchase the plan before you actually need it.

The reason for this is that certain policies may become unavailable or incredibly expensive the more you need them!

Long-term care insurance provides financial assistance to those who need specialized care on a day-to-day basis. And once you begin receiving this care, it’s highly likely you will need it for the rest of your life.

So basically, you are trading the cost today for a cost in the future. This equates to an insurance premium versus the burden of requiring full-time care.

What to Consider: Is Long-Term Care Insurance Worth it?

Most people begin considering long-term care insurance when they reach their mid-50s, and as mentioned, this can cost thousands of Dollars per year.

With this in mind, it’s incredibly important to do your homework and keep these considerations in mind:

1. Consider Your Worth

Do you have enough assets that are worth insuring? In other words, would be worth insuring in the eyes of an insurance company?

The general rule-of-thumb is that long-term care insurance is not advisable for those who own less than $200,000 in assets.

If your asset worth ranges from $200,000 – $2 million, you should be able to cover the monthly premiums and have plenty to protect.

2. Understand the Odds

Recent studies have found that as little as 20% of 65-year olds need long-term care insurance.

Why? Because an increasing amount of seniors only stay in care facilities for a shorter amount of time. To this end, the value of insurance is being driven down significantly.

These studies have also shown that while many seniors require nursing home care, a small portion only stay long enough to tally up large bills.

Only 50% of men and 39% of women stay long enough in these facilities before a long-term care policy kicks in to cover these costs.

With these odds in mind, it’s worth considering whether there are other avenues to be explored that are asset-based long-term care insurance instead of health-based long-term care insurance. Health-based insurance rises in price over time and, if unused, you lose your premium. An asset-based price is fixed and if insured parties don’t use it, beneficiaries receive the proceeds. Contact us for more information on this topic.

3. Get a Clear Understanding of What You’re Insuring

Make sure that you have a clear understanding of what your long-term care insurance policy covers.

Ultimately, long-term care insurance is about protecting your estate and prioritizing inheritances. It’s also about ensuring your medical costs are not left to burden others.

Keep in mind that even without long-term care insurance you will still receive a form of medical coverage, funded by your Medicaid savings.

But with this insurance, you could be denying your spouse or children an inheritance.

4. Consider That You May be Uninsurable

In today’s day and age, many an insurer has stepped up their medical screening processes to ensure they are insuring a worthwhile candidate.

If you summer from a chronic health condition such as diabetes, arthritis, Parkinson’s or Alzheimer’s, the odds may be stacked against you.

The reality is that a denial from one insurer could also lead to future insurance denials.

5. Consider Your Family History

Your family’s health history has also become a large part of the screening process for many an insurer.

Keep in mind that if either of your parents suffered from early onset dementia, Alzheimer’s, heart disease or diabetes, your insurance premiums could be set much higher.

Looking for Quality Asset Managers?

At Solera, our experts specialize in the management of your investments.

Wondering if long-term insurance care is worth it? Our consultant would be happy to help with in-depth advice and insight.

Get in touch with us at Solera today.


Daryl Seaton