There was a time when it was pretty easy and clear-cut to buy long-term care insurance. This type of insurance has changed a lot over the years, so anyone who wants to buy it should spend some time looking into carriers, coverage levels, and premiums.
In general, it costs about $71,000 a year for a person to live in a nursing home, which comes out to about $200 a day. The cost of assisted living for people who don't live there is about $32,000 a year, or $88 a day. Over time, that adds up to a lot of money in both cases.
People mostly want to buy long-term care insurance so that they can protect their assets in case they need to pay for a nursing home, assisted living, or home care. People who don't have this kind of insurance often have to sell their possessions to pay for the care they need. This means that many people have to sell their homes, cash in their retirement funds, and use up their savings.
On average, if you have more than $300,000 in personal assets, you might want to look into long-term care insurance as a way to protect yourself.
How old you are when you buy these kinds of policies is important. A person who is 50 years old might pay $2,000 for a policy, but a person who is 70 years old might have to pay $8,000 or more for the same policy.
It's also important how you feel physically. If you have schizophrenia, dementia, or are stuck in a wheelchair, you might not even be able to get coverage. Overall, your premiums will be lower if you are younger and healthier when you buy the policy.
The truth is that there are fewer insurance companies that offer this type of coverage now than there were a few years ago. There used to be more than 100 companies that sold long-term care insurance. Now, there are only five or six.
If you think you need this insurance, you should only try to get it from a well-known company that has been around for at least fifteen years and has been good to its long-term care policyholders.
You should also make sure that the company hasn't had to raise its premiums by a lot. Most of the time, these increases in premiums happen when companies start paying out on policies they wrote years ago but did not price correctly. Your state insurance commission can also help you figure out what is a fair price for long-term care insurance in your area and tell you about any new rules that apply to it.
It will take time to learn about your options for long-term care insurance, so the sooner you start, the better. You shouldn't sign up for a plan until you've had a chance to look at more than one. As an extra safety measure, you might want to talk to a reputable financial planner about how to handle this time in your life.
