Long-Term Care Insurance - 3 Common Questions

Long-term care insurance is something that confuses a lot of people. Insurance companies tell you one thing, and you may hear something else on the news. Long-term care insurance is designed to provide you with help if you ever have to go into a nursing home or other care facility. There are advantages and disadvantages to this type of policy. Here are a few common questions that people have regarding long-term care insurance.

1. Do I really Need This?

One of the most common questions that people ask is whether or not they need this type of insurance. There is no right or wrong answer, so you will have to answer the question individually. The decision should be made based on a number of factors. Your age should play a factor in the decision as well as your health. Most people wait to buy this coverage until they are approximately 65. However, if you purchase the insurance earlier, your premiums will be lower. 

Only about a third of men spend time in a nursing home and only 10% of the population spend over a year in a nursing home. 90% of the population does not spend a year in the nursing home, thus, the likelihood that you would need long-term care insurance is minimal. Of people that have purchased long-term care insurance the majority of it never gets used. With this knowledge, you should probably only get this coverage if the premium is 5% of your income or less. 

2. What Does it Cover?

Many people are confused about what exactly long-term care insurance covers. This type of insurance is designed to help you offset some of your nursing home costs. It will be shown as a percentage of your daily costs in the facility. The good thing about some long-term care policies is that they contain a form of inflation protection. Your dollars in today's terms will not be worth what they are now in a few years. These insurance policies will cover a portion of any expenses incurred while at a long-term care facility. It will not cover the entire cost, but only a percentage. 

3. How Much does it Cost?

Long-term health insurance costs can vary greatly from one company to the next. However, the biggest thing that affects the price of long-term care insurance is your age. The older you are, the more expensive the coverage becomes. It is also harder to qualify for a policy once you get to a certain age. The average age for getting a policy is 65. If you wait until you are 75 or 80, the premiums will be so high that you cannot afford them.

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