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Do You Need Long-Term Care Insurance?

 Medicaid vs. Long Term Care Insurance

Find a Texas Long-Term Care Agent

Is it worth it to buy long term care insurance? Experts say three to five years' worth of coverage is a good bet. On average, women need services longer than men — 3.7 years for women and 2.2 years for men.

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Approximately 70% of older adults will need some type of long-term care at some point. This type of care could include a nursing home or various degrees of in-home care, whether that includes skilled nursing care, help with activities of daily living, or some combination of services.

The problem is that these services are very expensive—and the costs are not covered by Medicare, outside of a 100-day period where skilled nursing care is covered for those who qualify and which does not cover non-medical care. This can be prevented with an LTC insurance policy. But these policies come with challenges of their own—and not everyone is a good candidate.

Do You Need Long-Term Care Insurance?

Given a choice, almost everybody would prefer to live out their last days at home -- and in good health. Unfortunately, that doesn't always happen. According to the National Center for Health Statistics, some 1.6 million people currently reside in nursing homes. That number is likely to increase significantly as the baby boomer generation continues to age.

Being financially ready for the possibility that you will require long-term care is an important part of retirement planning. But too many people are still preparing merely by hoping for the best.

Here are some things to think about to determine if Long-Term Care Insurance is right for you:

  • If you have assets to protect. If you have significant assets—such as a valuable home or savings account—that you want to protect and leave to your family, you may want to buy LTC insurance. If you can afford it, this type of insurance will cover your long-term care without requiring that you “spend down” to meet strict income requirements.
  • If you have a health background that suggests you need it. Long-term care policies can be expensive on their own, and sometimes include significant out-of-pocket costs. Essentially, you are taking a gamble that you will need long-term care someday. If you have a history of health problems in your family that typically need this type of care, however—such as dementia, diabetes, or cardiovascular disease—you may be more likely to need it yourself.
  • If you have no family members to rely on. If you have no close family members who could care for you, then buying long-term care insurance may be a better bet. That being said, it is possible that even if you have a family member ready and willing to care for you, he or she will not be able to provide the type of care you need as your situation progresses—or your future caretaker’s financial or job situation will change and make caring for you less of an option. Regardless of whether you have family members who might be able to care for you—and you should discuss this with them first—it is important to take the steps you need to prepare for your future.
  • If you can afford it. Long-term care is expensive. Generally, you should consider long-term care insurance only if you have at least $75,000 in assets excluding your car and home, and an annual income of $35,000 per year at minimum (although this can vary by state) according to the United Seniors Health Cooperative. Premiums can also increase significantly, so you will need to be sure you can afford them comfortably without making major sacrifices.

Medicaid vs. Long-Term Care Insurance

Long-term care insurance is private insurance available to anyone who can pay for it. Medicaid is for individuals and families living on a limited income, and many seniors use it to pay for long-term care in nursing homes. Long-term care insurance offers more flexibility and options than Medicaid.

Medicaid does cover some costs of long-term care, but the income requirements to qualify for Medicaid assistance are very strict. It is not uncommon for older adults to spend everything they have on their care in order to qualify, so that by the time they do, they are near destitution.

Because of the expense, making the decision to buy long-term care insurance is never easy. But for many seniors, it can be crucial. Do some research on your options, and hopefully you’ll be able to make the best decision for your situation.

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DISCLAIMER: Links to other websites or references to products, services or publications do not imply the endorsement or approval of such websites, products, services or publications by Elder Options of Texas. The determination of the need for senior care services and the choice of a facility is an extremely important decision. Please make your own independent investigation.