The Long Term Care Insurance Cost - Is It Worth It?
You may be wondering if you should invest in long term care insurance.
This relatively new kind of coverage is available in case you need
to have care at home from a medical professional, in a nursing
home, or in an assisted living arrangement. Many people believe
that they will not need long term care insurance, but the statistics
suggest otherwise. The US General Accounting Office has stated
that nearly forty percent of those people currently aged sixty-five
will need to spend some time in a nursing home within their lifetime.
Spending on nursing home care in this country is expected to rise
to around $330 billion by 2030. Currently, the average cost of
a private room in a nursing home is over $200 per day, and costs
are riding regularly. Surprisingly, no long term care is covered
by Medicare, and your private health insurance will not deliver
benefits on this kind of care either. Only a few days in a skilled
nursing facility after a hospital stay are covered. If you are
eligible for Medicaid benefits, you can receive nursing home care
coverage, but only a few people meet the age and income requirements
for this program.
For the rest of us, long term care insurance is a good way to
secure the future without having to worry about whether we will
be able to afford nursing costs. If you purchase your plan early
on, when you're in your 40s or 50s, you'll pay lower rates over
the length of your plan. A policy for a 50 year old is around $1000
per year. Someone in their 70s, by contrast, will pay over $6000
per year for the same plan, including a 90 day deductible, $200
per day in coverage, and an inflation rider. Once you've locked
in your annual premium, it can't be raised, even if your health
changes. This means that it's a good idea to get your premiums
locked in now, while you're still in good health, rather than try
to get coverage later in life. You'll find that smaller communities
get better premiums than larger ones, because nursing costs are
comparatively less expensive.
If you are buying your coverage early
on, you may wish to look for lifetime coverage. That way, you
won't have to worry about your insurance running out. However,
this is more expensive. Many people choose to cut costs by having
a 90 day deductible – agreeing
to pay for the first 90 days of nursing home care. This is a good
option if your savings will permit it. Another smart idea is to
make sure you purchase an inflation rider that will cause your
coverage to go up as costs do. That way you won't find yourself
paying extra if you need long term care later. All tax-qualified
policies must offer this coverage as an option. If you plan well
and get the right plan, long term care insurance is worth its premiums.
Just make sure that you get the best plan for your money, and buy