No formula for long-term insurance needs

No formula for long-term insurance needs

Long-term care insurance is a policy that helps cover medical and custodial expenses for people requiring extended care. Some people may need long-term care after a surgery or a medical emergency. Many adults will need this kind of care as they age and can no longer take care of daily tasks.

In fact, 70 percent of people who reach age 65 will need long-term care at some point. For older adults, deciding whether or not long-term care insurance is right for you is not a simple mathematical formula.

On one hand, you don’t want to risk not getting the assistance you need for daily activities or being in a positions of putting unnecessary burden on your family. On the other hand, premiums for coverage can be extremely high depending on when you obtain coverage and the type of policy.

Unfortunately, there is no single formula where you plug in your age, income and health concerns, and you get a simple “YES” or “NO” answer.

Perhaps Carolyn Rosenblatt of Forbes put it best: "Generally, unless you have a very large amount in liquid assets squirreled away and you don’t mind spending a significant chunk of it on long-term care for yourself and spouse, partner, or other disabled loved one, long-term care insurance is a good thing."  Rosenblatt suggests getting an insurance broker, who can negotiate the best rates.

Find out more about options for paying for long-term care and what to expect to pay in premiums with this Do You Need Long-Term Care Insurance? infographic.

As medical care costs have risen over the years, so too have costs of assisted living and nursing homes.

Today, a semi-private Houston nursing home averages a daily cost of around $144; for a private nursing home, the average daily rate rises to $198. At-home care for Houston averages to around $19/hour. See where your city ranks with this easy-to-read eldery care cost chart from NPR.

Medicare currently pays only for skilled medical care, and even then, it is only for a portion of the costs and for a maximum of 100 days. Custodial care -- that is, daily needs that 85 percent of people needing nursing home care require -- is not covered by Medicare.

Planning for retirement and for medical care as you age is something parents and children should discuss early. Never assume your parents or children are ready to cover the costs without warning, and some adult children who support their parents may find it easier to pay premiums on behalf of their parents for long-term care insurance.

The earlier you have a plan, the better; don’t risk finding yourself in need of long-term care without a plan for paying.

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Medicare vs. long-term care insurance

Having Medicare doesn’t cover long-term care that you might eventually need. Getting a proper long-term care policy can ensure that all of your needs are met. Consulting a high-quality nursing home early is also beneficial in securing your future.

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