As more people have become aware of just how expensive long-term care can be, they’ve become more proactive in trying to figure out a way to pay for it. And insurance companies have naturally jumped at the chance to sell them long-term care insurance. But while it can help pay the high cost of nursing homes and residential care facilities, long-term benefits don’t always cover what you think it does. The post below will cover the pros and cons of LTC insurance to help you determine whether it is right for you.
If you have questions about long-term care benefits, an experienced LTC insurance claims attorney can provide expert guidance, as well as help with a denial of an LTC. Contact Jonathan M. Feigenbaum, Esquire today to learn more.
What Are the Odds You Will Need Long-Term Care?
You have as much of a chance of needing long-term care as you have of avoiding it. This means that you will need a way to pay the high cost of long-term care.
If you have assets that are $300,000 more valuable than your home or think you are likely to need long-term care, LTC insurance could be the best bet for you. Think of LTC benefits as more of a safety net than an investment.
If you’re not wealthy and an LTC insurance premium will be more than 5% of your monthly income, LTC insurance may not be right for you. Remember that your monthly income will likely decrease after you retire. At the same time, your LTC insurance premiums will go up as you grow older.
Most people buy LTC insurance at 65 years of age. If you put off the decision until you’re any older, you risk facing extremely costly premiums. So, if you’re approaching the age of 65, you should decide whether LTC insurance is right for you.
But, be careful. Remember that insurance brokers are not often thinking about what is in your best interests. Because they work on commission, they will be looking at you as another sale.
What Factors Should You Consider?
When you decide whether you will need LTC insurance, you should consider the following six factors:
You should assess your risk tolerance and ability to pay LTC insurance premiums based on your age. If you are under 65, you might not know what kind of care you will need in 10 or 20 years, but LTC insurance premiums will be much lower. If you are over 65, you might have a better idea of your needs in the years to come, but LTC insurance premiums will be higher.
You should think about your likelihood of needing long-term care. If you are relatively healthy, obtaining LTC insurance will not be difficult, but you might not see a clear need for it yet. If you have serious health issues, you will need LTC benefits, but may find it difficult to get coverage or find it too expensive.
You should consider what your income will be in the future. If it’s low enough to qualify for Medicaid, which can pay for limited care at a nursing home, it might not be enough to afford LTC insurance premiums.
You should weigh your eligibility for tax benefits that come with the purchase of LTC insurance. For instance, if the value of your LTC insurance premium is more than 7.5% of your adjusted gross income, you could deduct the premiums from your taxes.
Family and Friends
You should think about how close you are with your family and friends and their ability to help you out. If you are fortunate, you may have family and friends who will step up and help pay for your long-term care. In that case, you will have less of a need for LTC benefits.
You should consider what other options you have as an alternative to long-term care. Is home care an option for you? Are there other things you could do with the money you would spend on LTC insurance premiums? You might benefit more from moving to somewhere with a lower cost-of-living or investing the money in a fund that provides liquidity of your assets until the time when you start needing long-term care.
Speak to an Experienced Long-Term Care Benefits Attorney
Long-term care benefits can be one of the most valuable assets you can buy before you reach 65 years of age. Purchasing LTC insurance can be a safe bet depending on factors such as your financial situation and personal health. However, there are regulations and laws that could also impact your decision. To learn more about long-term care insurance benefits, claims, and denials, contact Jonathan M. Feigenbaum, Esquire. He will provide a complimentary assessment of your claim and legal guidance on the next steps you need to take.