YouTube Review: Long Term Care Insurance 101 Life Happens

Long Term Care Insurance

If anyone depends on your income right now, you need term life insurance. It protects your family by replacing your income—which makes term life one of the most important parts of your financial game plan.

Long-term care insurance steps in if you develop a health condition that requires you to receive care and supervision. This could mean home health care, nursing home care or personal or adult day care. Many people mistakenly believe that Medicare or Medicaid would cover their care expenses, but this is often not the case. Without long-term care insurance in place, you may burn through your life savings or have no choice but to rely on a family member for care. Long-term care insurance is worth it because it protects your assets, spares your family from financial and emotional stress, and puts you in control of your health decisions.

There is no way to know for certain if you will someday require long-term care either in your home or in a specialized facility. But it’s likely when you consider that people are living longer than ever and that the U.S. Department of Health and Human Services reports that 69% of people will use long-term care services at some point.¹ Many people find long-term care insurance worth it because it offers peace of mind knowing that they won’t drain their assets or put undue pressure on family members.

Today, most long-term care insurance policies come bundled with life insurance coverage. Because both long-term care insurance rates and life insurance rates generally increase with age, it’s best to start shopping for a hybrid life insurance and long-term care policy when you’re in your 40s or 50s. That said, you can still buy a policy if you’re in your 60s or older⁠—just know that you’ll probably pay more than someone who’s younger.

While the cost of long-term care varies by facility and by where you live, it’s safe to say the cost is considerable. Long-term care costs range from $19,500 per year for adult day care to $102,200 per year for a private room in a nursing home.² This kind of expense can quickly deplete your nest egg, which is why long-term care insurance is such an important coverage to consider. Many people are surprised to learn that long-term care coverage costs less than they imagined. You may even be able to deduct the cost of long-term care insurance premiums from your state and federal taxes.

Because almost all long-term care policies are now hybrid policies that also include life insurance coverage, you will want to review your policy whenever you experience a major life change like a marriage, divorce or death in the family. It’s also a good idea to review your coverage once a year with a licensed insurance agent. This is especially true if your long-term care coverage includes a compound inflation rider or a purchase option.

Thank you for reading and have a great day!