Long term care insurance: Who needs
How do I know if I
would be a good candidate for long-term care insurance?
insurance is a gamble, as is the case with most insurance. If you end
up needing years of supervision and care, then long-term care
insurance was a good buy. If you die suddenly, never using any sort
of personal or nursing care, than it was a waste of money. And you
always need to remember, that no policy covers all of the cost. There
will always still be some bills to pay even with long-term care
As you or your
loved ones begin to consider long-term care insurance, you should
beware of pushy salespeople and scare tactics. The costs are high and
the fear is great, so make sure not to buy in a panic. Many people
simply should not bother with purchasing long-term care insurance.
Agents get enormous commissions (often 50% of the first year's premium
and another 10% for every year after that) so they have plenty of
incentive to sell these policies. You need to think long and hard
before considering this as a worthwhile investment.
insurance helps to protect assets and preserve the inheritance for
heirs. However, it's very expensive and never covers the full cost of
care. So, who are some of the individuals who should consider buying
a long-term care insurance policy?
The primary reason
to buy long-term care insurance is the protection of an individual's
assets in excess of the cost of long-term care. If your parent or
loved one is believed to become eligible for Medicaid within
approximately 12 to 18 months of entering a nursing home, you should
probably not consider this as a viable investment. Nursing home costs
vary significantly from area to area, so you should look at the cost
within your specific area. Just as a rough guideline, you may
consider long-term care insurance if your parent has at least $100,000
in assets (not including his house and personal belongings).
Those with ample
If your parent can
afford $300-$600 per month in premiums without affecting their
lifestyle, they may consider long-term care insurance. Some experts
have suggested that this type of coverage should not cost more than 5%
of a person's total income, which may be a pretty good guideline to
follow. Also, will they be able to continue paying the long-term care
insurance premiums if they rise or if your parent's income falls. You
need to keep in mind, if your parent fails to pay premiums, their
policy will be canceled; so they should not even start this type of
coverage unless they plan to continue it.
Those whose assets and income are not overly
People with a
large income or more than $1 million in savings, generally don't need
long-term care insurance as they will be able to pay for their care
out of pocket. However, they might still want it in order to protect
their assets for heirs or perhaps just for little peace of mind.
Continued on Page
from How to Care for Aging Parents by Virginia Morris
information and web page by Paul Susic M.A. Licensed Psychologist
Ph.D. Candidate Clinical Director-
Senior Care Psychological