Long-Term Care Insurance: Who Really Needs It?

Most of us secure insurance for house, car and properties, but we oftentimes overlook the most important investment for our retirement: long term care insurance. Only few people care of buying long term care insurance, and the rest are confident of using their lifetime savings at any means.  This sparks the question: Who needs long term care insurance? Is it worth it?

Who needs it?
Long term care insurance is typically needed by the elderly, primarily because they can no longer perform activities well and they are restricted from doing jobs to keep the money for their care. However, this type of insurance is also needed by anyone with serious illness or injury to ensure that they will be taken care of even without or less family involvement.  People with history of Alzheimer or dementia in the family are always the good picks for long term care.

People with total assets of $250,000 or below are not advised to purchase coverage since Medicaid could pick them up should they need long term care assistance. People under that asset level or also considered "low income" are encouraged to spend their money prudently than buy LTC policies. However, people with $2 million assets have sufficient money for put-of-pocket expenses and are not required to purchase long term care. Otherwise, people that hit the middle are the best candidates for long term care insurance. 


Like the other types if insurance, long term care insurance must be purchased before the services under the policy begin. The stake is that individuals who purchase LTC may or may not benefit from it. Some financial experts recommend that individuals nearing 50 or 65 should purchase LTCi because they are good candidates and more likely to use the policy for long term care than the younger ones. Some insurers will tell you to purchase earlier, as the benefits are ripe that age--but that is not always the case. 

If you are employed, you should check your employer's terms with regard to long term care insurance coverage, as most employers include LTCi for their employers and others extend coverage to the parents of their employees. If you are already insured under your employer, then you no longer need apply for a separate policy until after you retire.  


Cost of Long-Term Care Insurance 

The price of long term care insurance is determined by the following factors: the policy type, the age of the insured, and the duration of the policy. normally, policies that cover unlimited or lifetime period are most expensive than the policies that cover for a limited period. Moreover, the policies purchased by younger individuals are typically cheaper than the older ones, because a younger person has good health and can pay premiums for longer time. The cost is also affected by the type of care setting -- at home, at a nursing home, or at other professional facility. Other deductibles such as inflation rider and elimination period increase the cost of the policy. However, you have to weigh things out if you really need those deductibles; remember to take extra precautions unless you want to end up whipsawed.