In 2023, long-term care insurance will be a must for anyone who wants to protect themselves and their families. By that time, many baby boomers will be reaching retirement age and will need the coverage that long-term care insurance provides. If you’re not sure whether or not this insurance is right for you, keep reading. In this blog post, we’ll discuss what this insurance is, who needs it, and why it’s important.
What Type of Insurance Covers Long-Term Care?
Most health policies, including Medicare, do not cover long-term care. This is a type of insurance that helps pay for the costs of custodial care and personal care services. These services are typically provided in a nursing home, assisted living facility, or at home.
Who Needs Long-Term Care Insurance?
Anyone likely to need custodial or personal care services in the future should consider buying this insurance. This includes people of all ages but is particularly important for those over the age of 50.
Why Is Long-Term Care Insurance Important?
This insurance is important because it can help you pay for the costs of custodial care and personal care services. These services can be very expensive, and they are not covered by most health insurance plans. Without long-term care insurance, you may have to pay for these services out of your pocket.
How Much Does Long-Term Care Insurance Cost?
The cost of long-term care insurance varies depending on a number of factors, including your age, health, and the type of coverage you choose. Generally speaking, the younger you are when you purchase this insurance, the lower your premiums will be.
If you’re thinking about purchasing long-term care insurance, be sure to shop around and compare rates from different insurers. You can also talk to your financial advisor to see if this insurance is right for you.
Does Medicare Help With It?
No, Medicare does not currently help with long-term care insurance. However, this could change in the future. If you’re a Medicare beneficiary, be sure to keep up with the latest news and updates from the Centers for Medicare & Medicaid Services (CMS).
When Should You Buy It?
The best time to buy long-term care insurance is when you’re young and healthy. This way, you can get the most coverage for the lowest premium. However, it’s never too late to purchase long-term care insurance. Even if you’re already retired, you can still get coverage through a private insurer.
Where Can You Buy It?
There are three main ways to buy long-term care coverage, and each one has pros and cons worth knowing. Also worth knowing is that today’s coverage may come bundled with life insurance coverage (or an annuity).
Through an Insurance Professional
- Working one-on-one with an insurance advisor who specializes in long-term care insurance offers advantages such as:
- Flexibility. An insurance advisor will shop around for the best policy among several long-term care insurance companies. You’ll be able to compare long-term care insurance quotes and coverages to find the policy that works best for you. This level of flexibility is not usually available with the other two options for buying this insurance.
- A personalized experience. Your insurance advisor can help you get long-term insurance quotes, answer any questions you may have, and help you file a claim. Many people like having a point person like this for all of their long-term care insurance needs.
- A customized coverage solution. One of the best parts about working with an insurance professional is having the opportunity to customize a combination of features and benefits that works for your exact needs and budget. This is often not possible with the other two options for buying this insurance.
- Potential good health discount. If you’re in good health, you may qualify for preferred pricing. That’s because the policy will be individually underwritten, meaning the insurance company will base its price on your personal health history rather than on a broad group rate.
Through an Employer
A second way to buy long-term care insurance is through a group plan offered by an employer. The advantage of going this route include:
- Easy buying process. An employer typically offers a few preselected plans from which to choose. This can save you the time and effort of researching many policies because your employer will have done that work for you. On the flip side, you will not have as many options to customize your coverage as you would if you bought long-term care coverage through an insurance advisor.
- Convenient billing. Your premiums are usually billed through easy and convenient direct billing.
- No gender-based pricing. This insurance is usually priced higher for women than for men since women on average live longer than men. So buying this insurance through an employer could be a good move if you’re female.
- Easier to qualify for coverage. You may be asked fewer health-related questions to qualify for long-term coverage through an employer. This will make it easier (and often cheaper) to get long-term care insurance. That said, healthy people will often pay the same price as everyone else in their general age range. This means you might miss out on the kinds of discounts available through individual policies for being in good health.
Through an Association
A final way to buy long-term care insurance is through an association such as an alumni group, professional organization, or trade group. Plans offered through an association could be similar to individual plans offered through an insurance professional or more like plans offered through employers. The advantages of going this route include:
- Discounted pricing. Plans through associations typically offer pricing discounts. Just know that you will probably sacrifice the ability to customize your coverage in exchange for these savings.
- Potentially easier to qualify for coverage. If the plan is run similar to one offered through an employer, it’s often easier to qualify for coverage since you won’t be asked as many health-related questions on the application. This can be a big benefit if you’re in less than ideal health.