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Should You Buy Long-Term Care Insurance?

by Guest on March 14, 2011

Everyone wants to see their loved ones protected, happy, healthy, and safe.  In our society that frequently calls for adequate insurance coverage, because you never know when something bad might happen.

Home, health, auto, life, personal property…the list of possible insurance policies you may have to carry goes on and on.

In order to ensure our family’s ongoing security we work hard, and search for the best possible price on an insurance policy that we can get without compromising quality or coverage.

But there is one area some people forget about when choosing what type of insurance to get–long-term care insurance.

What Is Long-Term Care Insurance?

It’s generally something we’d really rather not think about. After all, long-term care means someone is incapable of doing things for themselves and must rely on others. Every day things like bathing, dressing, walking, getting in and out of bed, or back and forth to the doctor are long-term care issues.

These are the basic activities of daily life, called ADL’s in the health care industry. Long-term care can be carried out in the home or in a nursing home or assisted living facility. Having a long-term care insurance policy will ensure we receive the care that’s needed.

Who Needs Long-Term Care?

When most people think of someone needing long-term care, they think of the elderly–according to some statistics approximately 60% of Americans over the age of 65 will require some measure of long-term care during their lifetime.

But long-term health care needs aren’t limited to senior citizens– those same statistics say that about 40% of those receiving long-term care today are between the ages of 18 and 64. That’s because if someone of any age is injured in an accident or comes down with a debilitating disease, they could require long-term care–and that can be exceedingly expensive.

The reason it’s expensive is self explanatory: it’s long-term. It simply means the need for care is ongoing. That’s why long-term care insurance exists, to cover the cost of that care. Most traditional health care policies don’t cover long-term needs. Those that do often have a cap that prevents someone from spending too much on necessary care.

Alternatives to Long-Term Care Insurance

Acquiring a long-term care insurance policy can be difficult. You need to shop around because there can be huge differences in cost and the type of coverage offered.

Once you need long-term care, it can be next to impossible to get it, so you need to think ahead. There are alternatives to long-term care insurance, but they may not be suitable for everyone.

Some people use money they receive by cashing in a life insurance policy to cover long-term care. However, this means there is no longer life insurance in place.  Another method of paying for long-term care is by using a reverse mortgage to free up cash.

Or, you could take out a longevity policy and use money from that to pay for long-term care. Many people opt for sticking their money in savings accounts, CD’s, or annuities and using that money when needed. The least expensive alternative to long-term care insurance is by relying on Medicare and Medicaid.

However, there are some downsides to Medicare and Medicaid. You may not be able to access all the services you would like to have, and you won’t have the same choices as someone who carries long-term insurance in deciding where or from whom you receive care.

Costs of Long-Term Care Insurance

The reason a lot of people seek alternatives to long-term care insurance is that the price can be very high. Depending on the extent of coverage you seek, the cost may be astronomical.

Also be prepared to wade through a lot of details (in small print, of course) that define exactly what your policy covers.

Consult with a qualified insurance agent to help you decide what course you want to take. It may also be to your advantage to talk to a money manager before you make a final decision on whether or not to carry a long-term care insurance policy.

This has been a guest post by Bailey Harris, who writes about home insurance and related topics for homeinsurance.org.

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