3 Alternatives To Long-Term Care Insurance
These days there is a lot of emphasis on purchasing a long term care insurance policy. This is in consideration of the exorbitant costs of long term care services. Long term care insurance policy covers the cost of long term care services whether it is home care, care at a facility or home modification costs to adapt to a disability. Many people understand the need to buy such a policy in order to protect their assets during old age and also to get good quality care when required.
However, a long term care insurance policy does not come cheap – it can be quite expensive. Moreover after paying all those premiums for all those years you may not need the care – but you will not get any amount back. So for some people, this policy might not seem very viable. These people can arrange for some other provision to manage the long term care costs if they should need them.
You could pay for your long term care costs by utilizing your retirement savings or using your assets to cover the expenses and you don’t have to depend on anyone else. If you don’t need long term care your savings will remain with you. You can decide the quality of care that you can afford depending on your funds. On the downside, your savings may not be enough to cover all the expenses and there may be nothing left for your dependents.
Combined Life Insurance and Long Term Care Insurance Policy
A life insurance policy pays a death benefit to your beneficiaries after your death. Some life insurance policies now let you combine long term care insurance with your life insurance policy. If you need long term care expenses during your life time, it will come out of your death benefit to cover the costs associated with long term care. An accelerated rider added to a life insurance policy also does the same thing. In case you don’t need long term care services during your lifetime the death benefit will be paid to your beneficiary as the norm is.
Government- Funded Insurance Programs
Since long term care insurance premiums are quite high and you may have to pay it for many years – you should calculate properly whether it is sustainable for you, especially after retirement. There is no point in paying hefty premiums for long term care insurance when you have difficulty meeting your other needs.
The government-funded insurance programs like Medicare and Medicaid offer some coverage for long term care expenses. With Medicare it is very limited and you have to be Medicare eligible. Medicaid covers more of long term care costs provided you can prove that you have depleted your funds down to the minimum as required by the program. These rules are different for every state and the state will decide whether you are eligible to receive long term care benefits or not.
Yes, long term care insurance does have some advantages since it provides mental peace and protection of your savings. But your need will depend on your individual circumstances and affordability.