Why You Might Need Long-Term Care Insurance

Most people associate long-term care with the elderly. But, long-term care also applies to the ongoing care of individuals who no longer can perform tasks independently – no matter the age. These activities of daily living, also called ADLs, include bathing, dressing and eating. The inability to conduct an ADL includes illness, injury or a cognitive disorder.

Assisted living or long-term care is offered by private homes, assisted-living facilities, adult daycare centers, hospices and nursing homes. While some folks already plan for alternatives to long-term care insurance, others may need to think about buying insurance. Even if you never need long-term care, you might want to be prepared for the possibility.

Here’s what Michael Chapman from Provident Capital Management, Inc. says about long-term care insurance:

…Long-term care is often very expensive. Although Medicaid does cover some of the costs of long-term care, it has strict financial eligibility requirements–you would have to exhaust a large portion of your life savings to become eligible for it. And since HMOs, Medicare, and Medigap don’t pay for most long-term care expenses, you’re going to need to find alternative ways to pay for long-term care. One option you have is to purchase an LTCI policy.

However, LTCI is not for everyone. Whether or not you should buy it depends on a number of factors, such as your age and financial circumstances. Consider purchasing an LTCI policy if some or all of the following apply:

  • You are between the ages of 40 and 84
  • You have significant assets that you would like to protect
  • You can afford to pay the premiums now and in the future
  • You are in good health and are insurable

You might want to read that article at Chapman’s site, as he also provides tips on how to shop for LTCI. For instance, before you buy LTCI, it’s important to shop around and compare several policies. Read the “Outline of Coverage” portion of each policy carefully, and make sure you understand all of the benefits, exclusions, and provisions. Once you find a policy you like, be sure to check insurance company ratings from services such as A. M. Best, Moody’s, and Standard & Poor’s to make sure that the company is financially stable.

Finally, when comparing LTCI policies, you may wish to seek assistance. Consult a financial professional, attorney, or accountant for more information.

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