|
Do You Need Long-Term Care Insurance?
Americans are living longer; the oldest baby boomers are pushing 60, and more of us are dealing with the issues of aging parents and relatives. We know that long-term care is expensive — the average daily cost for nursing home care exceeds $140 in some areas. The question is, who really needs long-term care insurance and how can you make sure you’re getting the right coverage for your situation? The answers can be complicated, so doing some research and asking the right questions can help keep you protected.
Some experts say you don’t need long-term care insurance until you’re in your late 50s or early 60s. Others recommend waiting until age 65. Some say those in their 40s are wasting their money if they buy long-term care insurance. On the other hand, if you wait too long you may not pass the medical requirements or the premiums will be higher. Consider your own personal situation, health history, income and other concerns when deciding at what age to purchase long-term care insurance.
Choose a Financially Stable Insurer
There are a multitude of companies — some with very persuasive sales agents — offering long-term care insurance. But, because you may not need the policy’s benefits for 20 years, make sure the insurance company is financially sound and will be around to pay when you need it.
Investigate the company offering the policy to make sure it is highly rated by at least two of the leading ratings services. Some of those rating services are:
Policy Choices and Options
According to AARP, by the end of 2002, more than 9 million long-term care policies were sold in the U.S. and more than 6 million of those are still in force. And, if you’re buying a policy, it seems like there are millions of options. To help make things clearer, here are a few factors to consider:
Income: Some experts recommend against long-term care insurance if you are very wealthy or have very few assets. Those with middle incomes are the best candidates for this kind of insurance.
Benefit Length: Choose an appropriate benefit plan length — the average length of a nursing home stay is 2 ½ years. However, each situation is different so you won’t be able to know for sure if a nursing home stay will be two months or eight years.
Elimination Period: The elimination period is the length of time before the policy begins paying benefits. This waiting period might be 30, 60, 90 or more days. You may want to choose a shorter waiting period because nursing home costs can add up quickly.
Disability Criteria: To qualify for benefits, you typically must be unable to perform a certain number of “activities of daily living” such as bathing, dressing eating, or using the bathroom, etc. Some policies require that you be unable to perform three or more such activities, some call for two or more.
Inflation: If you’re under age 70, choose a policy with inflation protection, otherwise your benefits may get eaten up.
Other Resources
One excellent resource is the Wisconsin’s Office of the Commissioner of Insurance. The OCI has produced a “Guide to Long-Term Care” and it answers a variety of questions about long-term care insurance, what to look for, the right questions to ask, and how to decide if you need it. Here are a few helpful resources:
- Wisconsin’s Office of the Commissioner of Insurance — Medigap Helpline (call for answers to questions on long-term care insurance) 800-242-1060 or visit http://oci.wi.gov.
- Consumer Reports magazine — The magazine reviewed long-term care insurance in November 2003 — http://www.consumerreports.org.
- http://www.clarkhoward.com — The Web site of consumer advocate and radio show host Clark Howard offers advice on buying long-term care insurance and a host of other consumer issues.
Even with all the things to consider and traps to avoid, ultimately, you want to be prepared before a crisis hits. Take time now to consider whether long-term care insurance is right for you — or your parents. You’ll be grateful for that peace of mind when the unexpected happens.
Contact your Johnson Insurance representative for more information.
|
