Long-term care insurance can help cover the expenses of a nursing home, assisted living facility, in-home care, and certain other long-term care expenses for an aging person who can no longer perform certain tasks of daily living like bathing, eating, dressing, or using the bathroom.
The main benefit of buying long-term care insurance is cost savings. Your rates for premiums will be far less than what you'd pay for care without insurance. With insurance, you can preserve your savings, assets, and financial independence.
Long Term Care Insurance Pros and Cons
Experts say three to five years' worth of coverage is a good bet. On average, women need services longer than men — 3.7 years for women and 2.2 years for men. Women accounted for nearly two-thirds of all long-term care insurance claims paid in 2018, according to AALTCI.
Long-term care (LTC) insurance has some disadvantages: * If you never need the coverage, you're out-of-pocket for all the premiums you've paid. * There is the possibility of premium increases in some plans. Once you've started, you must pay higher premiums or you lose the money you've already spent.
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AARP endorses certain long-term care insurance policies underwritten by New York Life. These policies are specially marketed to AARP members. AARP long-term care insurance policies include traditional, stand-alone policies, and hybrid policies (which combine life insurance with long-term care benefits).
There are no age requirements to purchase long term care insurance. While insurance companies may recommend an individual purchase the policy as young as 40 years old, Consumer Reports recommends waiting until the age of 60. Waiting too long to buy a policy can result in prohibitively expensive premiums.
Suze recommends people only buy an LTC policy today, if they can easily continue to pay the premium if it increases by 40 percent over the coming years. ... LTC coverage only pays a benefit to people who need home health care, nursing home, or another form of covered long-term care.
Cost of Long-term Care Insurance
For instance, a 55-year-old couple can expect to pay about $2,500 per year in annual premiums for long-term care insurance. A 60-year-old couple would pay $3,500, but by 65 it would cost $7,000 and by 70 it would likely cost $14,000 or more per year.
The optimal age to shop for a long-term care policy, assuming you're still in good health and eligible for coverage, is between 60 and 65, financial advisers say. Couples might take a look five years earlier.
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