As people age, the chances that they will need nursing home care increase. Long-term care costs can be astronomical, so should you buy long-term care insurance? That depends on several factors, including your health and financial situation.
Here’s what you need to know about long-term care insurance before deciding whether to buy a policy.
What is long-term care insurance?
Most health insurance policies don’t cover nursing home stays, and Medicare only covers skilled care for a specific time. A long-term care policy will help you cover the cost of staying in a nursing home and prevent the need to spend down your assets to be eligible for Medicaid. Depending on what type of long-term care policy you get, it may cover the following:
- Skilled care in a nursing home
- Nursing care in your own home
- Assisted living facilities
- Adult daycare
There are several options for choosing long-term care insurance, such as traditional stand-alone long-term care policies, hybrid life and long-term care policies, and annuities with long-term care benefits. Each one of them has its pros and cons.
Anyone over 65 years of age has a 70% chance of needing long-term care, possibly within the next five years. However, most people don’t carry long-term care insurance because of its complicated nature and expensive premiums.
Your estate planning process should include a plan for long-term care. Skilled nursing care can be expensive, and it’s essential to have a plan to cover those costs. There are several ways to fund long-term care, and each comes with its own set of pros and cons. While it may be a difficult conversation to have, it is important to start thinking about these issues now to make the best decisions for yourself and your loved ones.