6 Things to Consider Before Buying Long Term Care InsuranceFebruary 2, 2014
Buying long term care insurance is a good way to strengthen your financial plan. However, this purchase is not something that you should do in haste.
Before you decide to shell out money for this policy, here are six things that you need to think about in order to help you decide if long term care insurance is the best choice for you.
1. Cost of Long Term Care
According to Genworth’s Cost of Care Survey, the median annual cost of staying in a nursing home costs $83,950. Meanwhile, the average cost of staying in an assisted living facility is currently priced at $41,400. Though in-home care costs relatively cheaper than these settings, it is important to note that it can also end up being hefty given the gradual increase of its cost.
Clearly, long term care services are not cheap. If you end up needing them for an extended period of time, your nest egg could be at risk of being depleted. Long term care insurance can protect you from that financial catastrophe.
2. What Health Insurance Only Covers
Health insurance doesn’t cover long term care, which involves providing assistance in basic activities of daily living that can be spurred by frailer health, old age, or cognitive decline. This care can be administered in the home or in other care facilities.
3. Financial Standing
Before you decide to buy long term care insurance, you need to look at your financial standing and see if you have the capability to pay for the premiums. If you find that you have limited income and resources, this policy may not be best choice because you can easily qualify for Medicaid. Meanwhile, if you have assets that can pay for long term care yet you intend to preserve them for you and your loved ones, purchasing long term care insurance is the smart move.
4. Features and Coverage
You need to know what you’re buying. Before you purchase a policy, you need to have a clear understanding of what it is about. Review the policy and scrutinize important areas such as its duration, benefits, benefit triggers, elimination period, inflation protection, and the type of care services it covers.
5. Pre-existing Conditions
Some insurance companies will not sell you the policy if they found that you have incurred medical conditions prior to your application. Meanwhile, others will provide you with coverage, but not extensive if it is due to your pre-existing conditions.
6. Insurance Companies and Agents
Make sure that you deal with an insurance agent whose primary goal is to help you and not just to earn a commission. Furthermore, look for the right insurance company where you would buy coverage from. Go for an insurer that has the financial capability to stay in business and has a good rating in terms of paying claims.
Buying long term care insurance is one of the most important purchases that you will make. That’s why it’s just right to practice caution before you acquire it. Looking at these six items will help you do exactly that.