An estimated 70% of people over age sixty-five will need long term care. That means that if there are ten old friends at a dinner party, seven of them will probably end up needing to enter a long term care facility. So statistically speaking, planning for the eventuality of long term care is a good idea for everyone. The biggest factor to consider when talking about long term care is Medicaid. Medicaid Planning is appropriate (even urgent) for everyone. Visit our Medicaid Planning page to learn more.
But what about long term care insurance? Even though most people don’t have it, we believe protecting yourself with this kind of insurance is certainly in your best interest. Here are five things to consider when shopping around for the right long term care insurance provider:
1. Don’t just go for the cheapest option.
The costs of premiums is an important factor when choosing your insurance, but price needs to be balanced with reliability. It’s usually best to buy from a large, dependable carrier with plenty of resources to hold out over the years. You may find the best deal working with an agent who specializes in long term care insurance.
2. Always, always read the fine print.
Before you commit, familiarize yourself with the definitions and terms of the contract. Make sure you know exactly what your policy covers, and what it does not cover. Most long term care contracts pay benefits only under certain conditions. For example, you may only receive benefits if you become unable to independently perform two out of six basic activities of daily living (such as eating or showering). Make sure you understand the terms of your policy so you can choose the one that’s right for you.
3. Consider shared benefits.
If you’re married, you may want to ask your insurance agent about purchasing a rider that allows you to share benefits with your spouse. This might just be a cheap way to double the benefits available if one of you needs it down the line. When you purchase policies together, you may even be eligible for a discounted price.
4. Don’t forget about inflation.
In our business, we see this all the time: older couples who purchased life insurance policies when they were in their twenties. Fast forward sixty years and their policies are worth only $500 each. That figure may have been sufficient in the past, but in today’s market that’s not nearly enough to cover the cost of a funeral. This is a good example of the risks of inflation. Buying inflation protection may seem expensive, but consider this: if you’re purchasing long term care insurance at age 45, you may not need to use it for another 30 years. Talk to your insurance agent about your options.
5. Don’t wait too long.
To put it bluntly, the older you get the harder and more expensive it becomes to get long term care insurance. The sooner you purchase your policy, the more affordable your premiums are likely to be. When you’re in your 50s, insurance carriers will typically raise premium prices by 3-4% each year you age. Once you hit 60, that figure goes up to a whopping 6% or more increase each year. When you do the math, it pays to lock in your policy as soon as possible.
But what about long term care insurance? Even though most people don’t have it, we believe protecting yourself with this kind of insurance is certainly in your best interest. Here are five things to consider when shopping around for the right long term care insurance provider:
1. Don’t just go for the cheapest option.
The costs of premiums is an important factor when choosing your insurance, but price needs to be balanced with reliability. It’s usually best to buy from a large, dependable carrier with plenty of resources to hold out over the years. You may find the best deal working with an agent who specializes in long term care insurance.
2. Always, always read the fine print.
Before you commit, familiarize yourself with the definitions and terms of the contract. Make sure you know exactly what your policy covers, and what it does not cover. Most long term care contracts pay benefits only under certain conditions. For example, you may only receive benefits if you become unable to independently perform two out of six basic activities of daily living (such as eating or showering). Make sure you understand the terms of your policy so you can choose the one that’s right for you.
3. Consider shared benefits.
If you’re married, you may want to ask your insurance agent about purchasing a rider that allows you to share benefits with your spouse. This might just be a cheap way to double the benefits available if one of you needs it down the line. When you purchase policies together, you may even be eligible for a discounted price.
4. Don’t forget about inflation.
In our business, we see this all the time: older couples who purchased life insurance policies when they were in their twenties. Fast forward sixty years and their policies are worth only $500 each. That figure may have been sufficient in the past, but in today’s market that’s not nearly enough to cover the cost of a funeral. This is a good example of the risks of inflation. Buying inflation protection may seem expensive, but consider this: if you’re purchasing long term care insurance at age 45, you may not need to use it for another 30 years. Talk to your insurance agent about your options.
5. Don’t wait too long.
To put it bluntly, the older you get the harder and more expensive it becomes to get long term care insurance. The sooner you purchase your policy, the more affordable your premiums are likely to be. When you’re in your 50s, insurance carriers will typically raise premium prices by 3-4% each year you age. Once you hit 60, that figure goes up to a whopping 6% or more increase each year. When you do the math, it pays to lock in your policy as soon as possible.
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