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How to Make a Smart Long-Term Care Insurance Buying Decision

Are you struggling with the decision of how to fund potential long-term care needs in retirement? You’re not alone. Millions of retirees require long-term care for a broad range of conditions such as Alzheimer’s, dementia and more. In fact, the U.S. Department of Health and Human Services estimates that 70 percent of retirees will need long-term care at some point.1

As you might guess, that care can be costly. According to a study from Genworth, a private room in a nursing facility cost more than $7,500 per month on average in 2016. The average monthly cost of a semiprivate room in an assisted living facility was more than $3,500.2 Considering that long-term care is often needed for months or even years at a time, it’s easy to see how the costs can accumulate.

One way to lessen financial impact of long-term care is with long-term care insurance. With a long-term care insurance policy, you pay premiums today and possibly into the future. Then, if you ever need long-term care, the insurance company pays some or all of the costs. That limits your out-of-pocket expenses.

While long-term care insurance can be a helpful resource, many people find it challenging to navigate the buying process. Long-term care policies have a variety of features and benefits, so it can be confusing trying to determine which policy is the right one for you.


Don’t wait too long to explore your options.

Many people assume they don’t need to buy long-term care insurance until they’re retired. However, this assumption is often incorrect. The years before you retire are often the best time to consider long-term care insurance.

Long-term care insurance has an underwriting element. That means the premiums you pay for the policy, or even your ability to get coverage, could be dependent on your age and your health. The younger and healthier you are when you buy your insurance, the lower your premiums are likely to be.

If you wait to buy long-term care insurance, you may find that you have few options available. Or you may find that the premiums don’t fit into your budget. You can avoid this problem by starting your search earlier rather than later.


Be flexible with your needs and criteria.

Long-term care policies have many variable features. For instance, you can often adjust your amount of coverage, the period of time the coverage is available, whether your coverage adjusts for inflation and much more.

Changes to these features adjust your coverage, but they also adjust your premiums. That means you can often create a policy that both meets your needs and fits your budget if you are flexible. Think about your needs and your priorities, and then identify those areas in which you may be able to compromise to get a lower premium.


Explore hybrid policies.

Some people avoid buying long-term care insurance because they’re concerned they will never use the coverage. They’re worried that they will pay premiums for years and then never take advantage of the insurance.

If you share this concern, you may want to look at hybrid policies. These are policies that have both a long-term care element and a form of life insurance coverage. If you don’t use all of your long-term care coverage, there could still be a death benefit available in the form of a life insurance payout. That way your premiums for the policy aren’t wasted.

Are you ready to consider long-term care insurance? Contact our team at Wise Wealth. We can help you analyze your needs and develop a strategy.





Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

16162 – 2016/10/18