There’s no question that paying to live in a nursing home, assisted living facility or even at home with nursing care is expensive.
To help offset those costs, consider investing in long-term care insurance. Seventy percent of Americans age 65 and older will need expensive long-term care at some point in their lives, according to the Association for Long-Term Care Planning (ALTCP).
The average man needs 2.2 years of long-term care, and the average woman needs 3.7 years of care. Those with dementia or other cognitive challenges can stay in a nursing home for five years. Long-term care insurance is designed to help pay for exactly what it sounds like – long-term care. Most policies help pay for the daily needs of people who have chronic illnesses, disabilities or other conditions whether you live at home, in an assisted living facility or in a nursing home. Some long-term care insurance plans can also pay for adult day care, care coordination and other services.
While you may not need these services until you’re in your 70s, 80s or even 90s, the time to purchase long-term care insurance is when you’re relatively young and healthy. The American Association for Long-Term Care Insurance (AALTCI) recommends buying a policy when you’re between the ages of 52 and 64. Policies will cost less when you’re young and in good health; if you wait until a serious health condition arises, you may not be able to get insurance coverage or pay much more to get it. Discounts you get for being in good health when you buy the policy could benefit you financially for decades to come.
Here are a few things to consider from the American Association of Retired Persons (AARP), ALTCP and AALTCI:
If your income is and assets are relatively low, spending money on a long-term care policy may not make sense if you can qualify for Medicaid. Consult a financial adviser and insurance broker before purchasing a policy to talk about your income, expected needs, tax situation and other concerns.
If you have reliable, interested family and friends locally, they may be able to help care for you, reducing your costs for care.
Do you want to age in the home you’re currently living in, or would you rather move to a senior community or somewhere closer to family? Compare the costs of care in the area you expect to live in with the services you want and the benefits of the policy you’re considering when making your insurance selection. Before you buy, consult one of the long-term care associations and talk to an independent insurance broker, who can help navigate the system and find the best policy for your individual needs.
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