Is Long-Term Care Insurance Worth It?

Assisted living facilities in the United States cost an average of $4,000 a month. For individuals requiring more care, a private room in a nursing home costs an average of $8,365 a month. This expense is always changing, with a documented increase of 8% over the last 5 years. That might seem expensive to many people and not so expensive to others. The real question is, is it worth it?

Long-term care insurance covers the “care expenses” of individuals who are disabled or ill and must enter a care facility or hire a caregiver in their home. These insurance plans come with a high premium though. Is the expense worth it for families looking ahead to the future? Let's take a look...

Medicare and private health insurance plans typically do not cover long-term care. Because of the high cost of this type of care, aging adults and their families need other options for paying for these expenses.

Long-term care insurance meets a need for adults who do not qualify for Medicaid or do not want to be restricted to facilities and providers accepting Medicaid. Here are some ways to help decide if this option is right for you or your loved one.

How Does Long-Term Care Insurance Work?

A long-term care insurance plan is intended to cover the expenses associated with daily living for individuals who are chronically ill or disabled and require regular caregiver support. Medicare and traditional health insurance plans won’t cover these expenses and there are limitations that come with using Medicaid to pay for this type of care. Specifically, these plans cover housing expenses in facilities, caregivers and any of the expenses associated with keeping up with a person’s activities of daily living.

These insurance plans don’t cover medical care, so they are a supplement to the patient’s existing health insurance. Most coverage options require the insured individual to cover care expenses for a predetermined amount of time, like 30 or 60 days, before the provider begins issuing reimbursements.

What Does Long-Term Care Insurance Cost?

Typically, the cost of long-term care insurance is determined by an individual screening. Current health, age, gender and location are all considered before premium costs are quoted.

According to the American Association for Long Term Care Insurance, the average premium cost for a healthy, 55-year-old adult is $2,007 a year. For couples of the same age, the average expense is $2,466 a year. Older adults can expect a higher cost for coverage.

Purchasing a Plan

Because of the high cost of premiums, which increase as the insured grows older, it is important to consider that long-term care insurance isn’t right for everyone. Individuals with a strong support system may decide against taking on the expense of long-term insurance they may not use. Additionally, a pre-existing condition may disqualify some seniors from coverage.

Creating a plan for financing future needs requires an individualized approach. A financial advisor or insurance broker can be an invaluable resource for adults reaching middle age and hoping to make the smartest decisions about the next 25 years or so.

~ Here’s to Your Health and Wellness