As part of your estate planning, you must consider how you will arrange for your medical care and other needs if you are no longer able to take care of yourself. Many elderly Americans will enter long-term care facilities at some point in their lives, but only about 13 percent of all Americans in these facilities actually end up purchasing long-term care insurance. Overall, fewer people are purchasing long-term care insurance than in past years. But that doesn’t mean it’s not a good or feasible option for you.
You can expect to pay tens of thousands of dollars for a semiprivate room in a nursing home per year. That is a lot of money for an elderly person with little to no income and limited resources. Long-term care insurance can help you cover these costs.
If a long-term care policy is a possibility for you, here are some of the things you should know before you purchase a policy.
- Know your needs: Before you can choose a policy that’s going to best fit your situation, you need to have a good sense of what your circumstances might be. Talking to a long-term care specialist is a good place to start, and a financial planner can also help you determine how much money you’d need to set aside for long-term care and what you could expect to pay for certain types of that care. After that, you can begin comparing policies to figure out exclusion periods, years of care covered and other issues that will factor into your choice.
- Only get what you need: Just like you wouldn’t purchase a luxury car when you only need a vehicle to get you from Point A to Point B, you don’t need to get the very best long-term care policy if your coverage needs are relatively limited. This is also true if you simply can’t afford that coverage. Even having a little bit of coverage is better than having none at all.
- Share your long-term care plans with others: It’s not just enough to have your long-term care plans written down in your estate plan. You need to have a trusted friend or relative who can be your advocate if those plans ever need to be put into action. Decide who this person will be (or perhaps even more than one person), and talk to them about your wishes.
- Apply early: You’re not going to be able to purchase a long-term care insurance policy if you’re already in failing health, so it is strongly recommended that you purchase the policy early on, before you turn 65. The older you get, the more likely it is your application will be rejected, so get a head start and avoid being left without coverage options.
- Frequently review and update your plans: As you age and your health conditions change, you may need to update your coverage options. Take some time each year to review your policy and see if there’s anything you need to change.
For more information about issues to consider before purchasing long-term care insurance, contact us today at Baker Law Group, P.C.