Long-Term Care Insurance: Is It Worth the Investment?
October 22, 2024 | Kari Mellone
Long-term care is becoming a growing concern for individuals. With the generational family unit playing a less active role in the care of elders, more and more senior individuals naturally find themselves in declining health and in need of additional support from professional caregivers. Even if children or grandchildren are helping to care for seniors, they may require help to meet the demands or need medical attention.
Long-term care (LTC) is a solution to these problems. However, it comes with a high cost, and many find themselves unable to afford ongoing care. Long-term care insurance can help fund the expenses of potential long-term care needs. However, is it worth it? Will you or a loved one actually end up needing long-term care in the future, or is it unnecessary? In this article, we’ll explore the benefits and drawbacks of long-term care insurance so you can make an informed decision on the best option for you and those you care about.
What is Long-Term Care? How Is It Paid For?
Long-term care provides continuous hands-on assistance and support to those in need due to chronic illnesses, disabilities, or age-related conditions. While it may involve some medical attention, the primary emphasis is on personal care and daily tasks such as bathing, dressing, and using the bathroom.
Not everyone realizes that Medicare does not cover long-term care until it’s too late. This can cause complications if the need for LTC arises and cause financial strain on the individual and their family. Therefore, it is advised that individuals obtain long-term care insurance or an alternative funding solution.
What is Long-Term Care Insurance Policy
A long-term care insurance plan helps pay for the costs associated with prolonged care services. It can cover some or all of the costs of care provided in assisted living facilities, nursing homes, or home-based care.
Is It Worth It?
Initially, it seems that long-term care insurance would be an ideal solution to cover long-term care expenses, and for some individuals, this can be true. However, what if you end up not needing long-term care in your later years of life? This is where the downfall of a LTC insurance policy is apparent. Most often, in this situation, you end up losing the premium funds you’ve paid to have the policy. As a result, if you do find yourself needing long-term care, yes, LTC insurance is worth having; however, if you don’t, arguably, it can be considered not worth it. So, what are the alternatives?
Fortunately, there are several options available that can protect you from the high costs of long-term care and provide a source of income even if you do not need extended care within a nursing home or assisted living facility.
Let’s look at those other options:
Self-Funding
One method for paying for long-term care includes self-funding. However, it can be difficult for most people to save up sufficient funds to meet the expenses associated with long-term care, which can rapidly deplete savings accounts.
Long-Term Care Annuity
A long-term care annuity combines an annuity with long-term care insurance benefits. This option can provide regular payments or a one-time sum of money. It also includes funds set aside for potential long-term care costs. If used for long-term care, annuities may enhance their value and benefits with a multiplication factor.
Find out More: Long-Term Care Annuity: How Does it Work?
Subscription Based Programs
There are some subscription-based programs, such as home health care subscriptions, that can help cover some of the cost of needing care later in life. Another perk to these types of programs is that if it is considered too late to get a traditional long-term care insurance policy because you can’t qualify medically or the premium is cost prohibitive, this option has less underwriting and several budget options.
Making the right choice for yourself or a family member is a critical decision that can have a lasting impact on your future, your ability to receive essential care, and your financial stability. If you want more information on long-term care coverage and the LTC insurance alternatives described, contact the trusted team at Twin City Underwriters. We have been helping people like you for over 50 years obtain the right insurance and coverage based on their unique needs.
At Twin City Underwriters, we know that individualized attention to a client’s personal situation and needs are especially important, which is why we take the time to understand you and your financial goals. Contact us to schedule an appointment with one of our experienced insurance agents.
Are you ready to have a meaningful discussion about your financial needs? Call or email TCU today to set up a free, no-obligation appointment with one of our dedicated agents.
Call Twin City Underwriters to learn more: 651-488-0172 or 800-507-6778.
