Why is long-term care insurance worth it?

First, it’s worth reviewing a long-term insurance definition.

Long-term care insurance is coverage that pays for care either in your home or in a specialized facility should you develop a health condition that requires partial or full-time care.

Long-term care insurance is an increasingly important consideration for an aging population that is living longer than ever. The U.S. Department of Health and Human Services reports that 69% of people will use long-term care services at some point.¹ And that care doesn’t come cheap: 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

These statistics underscore the reasons why long-term care insurance is worth it. They include the following:

  • It protects your assets. Many people falsely believe that public health programs like Medicare or Medicaid will cover their long-term care expenses. In reality, Medicare caps payments for skilled care at 100 days, and it only pays if certain requirements are met. Meanwhile, Medicaid only kicks in after you spend down your own assets. Private health insurance cannot be relied on either, since it only pays for doctor and hospital bills. If you planned on relying on these options, you would have to spend most of your own money to pay for care. That would deplete your hard-earned savings and make it impossible to leave money to family members or a favorite charity when you pass away.
  • It takes pressure off your family. It’s also not a great idea to assume that a family member would step up to provide care. Becoming a caregiver is physically, emotionally and often financially burdensome. Many people are not able or willing to make such a huge sacrifice. This is especially true when the caregiver is a spouse or partner also facing their own aging health issues.
  • It gives you care options. Long-term care insurance gives you flexible options when it comes to deciding where to receive care. You almost never get a say when you rely on a public health program like Medicaid to cover your long-term care expenses. Many facilities don’t accept Medicaid, so your only option may be a no-frills nursing home with shared rooms rather than a more amenity-oriented private nursing home where you’d get your own room. What’s more, Medicaid doesn’t pay for all (or even any) assisted living costs in many states. Relying on care from a family member likewise limits the say you have in the care you receive.
  • It may come with life insurance protection. Today, many long-term care insurance policies are hybrid policies that bundle long-term care coverage with life insurance coverage (or an annuity). Hybrid life and long-term care policies offer your loved ones protection in the event you pass away, while also giving you the assurance of knowing that your long-term care needs are covered. Plus, a hybrid life and long-term care policy can save you the time and expense of buying two separate policies.
  • It puts you in control and gives you peace of mind. With long-term care insurance coverage, you never have to wonder what would happen if you needed long-term care and how that care would be paid for. And because long-term care insurance can be bundled with life insurance, your family has the extra benefit of knowing they’re protected if you were to pass away. For many people, this peace of mind is the top reason for buying a long-term care insurance coverage.

There are many options for long-term care insurance. A licensed agent can help you find the right one that works within your budget⁠—plus, you may also be able to deduct long-term care insurance premiums from your federal and state taxes. Learn about the three main ways to get long-term care insurance.

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