The Pros and Cons of Long Term Care Insurance
Thursday, August 28, 2008
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Statistics suggest that as many as 50% of the population will need a period of long term care in a nursing home due to illness, injury, or debility from old age. Such care can be very expensive, especially since most types of health insurance don’t cover it. Medicare, for instance, will only pay for a limited amount of nursing home care and only under certain conditions. Most people end up paying for nursing home care privately, out of their own pockets. But there is another option. Long term care insurance (see privatehealth.co.uk) will pay for the cost of “custodial” care in a nursing home or even in some cases at home. Should you consider purchasing a long term care insurance policy? There are pros and cons.
Pros
Long term care insurance can help you protect your assets. Without long term care insurance, if you require nursing home care, you will have to pay for it out of pocket until your assets are depleted. Long term care insurance can protect the assets you worked so hard to build.
Some long term care insurance policies will pay for care in the home as well as in the nursing home. The ability to hire home caregivers allows you to remain in comfortable, familiar surroundings as you deal with your health problems. Lots of established companies sell long term care insurance policies, so with a little shopping around and research you can be certain that your money is safe and that your benefits will be available when you need them.
Cons
Long term care insurance can be expensive and difficult to obtain, especially if you try to purchase it when you’re older or after you’ve already developed health problems. If you’re not sure about spending the money for long term care insurance, take a moment to look at your asset profile. Do you have a lot of money and property to protect? If so, it’s probably worth biting the bullet and purchasing the insurance. If not, you may want to consider skipping the long term care insurance and letting Medicaid pay the bill when and if you require nursing home care.
Advertising materials can be deceptive. Don’t believe everything you read in the advertising brochure. Instead read the policy and the legal documents carefully before paying any money or signing any papers.
Premiums are likely to increase as you age. Many families tell heartbreaking stories of deciding they couldn’t afford their long term care insurance and cancelling it... only a few months or a few years before it was needed. If you decide to purchase long term care insurance to protect your assets, think long and hard before letting the policy drop.
In summary, long term care insurance is probably a good bet if you have many assets you want to protect. It can even keep you out of a nursing home sometimes, and finding reputable long term care insurance isn’t difficult. On the other hand, a good long term care insurance policy can be expensive, especially as you age. It’s also important to know exactly what you’re paying for.
Why not just take out life insurance? Normal life insurance policies will often give a payout in the event of a policy holder’s death, but they will not necessarily pay out if the policy holder becomes disabled, or needs long term care. It is possible to combine long term care insurance with life insurance, but make sure you thoroughly research the topic before taking out a policy. If you’re specifically looking for a life insurance policy, then take a look at Legal and General. For information on other reputable companies refer to the Association of British Insurers.
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