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Long-Term Healthcare Insurance: Can I Afford It?

People are living longer.  Also, individuals are becoming more aware of healthy eating.  Still, maladies that have historically surfaced in old age will undoubtedly find some of us.

The majority of Americans will be eligible for Medicare by age 65, but long-term care is limited under Medicare.  Subsequently, if a debilitating illness occurs, people could exhaust their life savings.  Long-term health care insurance is designed to save some of that money.  What does it do?  It helps protect your assets.  Will you ever use it? Hopefully not.  Still, it is important to understand its benefits in order to make an informed decision.  Below briefly touches upon some guidelines.

  • Long-term healthcare insurance pays for part or all of the cost of long-term care (should an individual meet the medical guidelines).
  • It gives flexibility as to the type of care you receive (e.g., nursing home, assisted living, adult day care).  NOTE: Some policies only cover nursing home care; others cover assisted living care, nursing home care, home care, etc.
  • The rate of the policy is based on age and health.  This means if a person takes out a policy at a younger age and he or she is in good health, the premium will be at a lower rate.

The cost of long-term healthcare insurance can be expensive.  Still, the price of an incapacitating illness might deplete a person’s savings (so it might be wise to at least investigate this insurance).  If the decision is made to purchase a policy, it is crucial to read the entire plan.  For example, some policies pay for home assistance, and some don’t; it depends on the product.  You must understand the exact coverage you are getting.

The outlay for all of this?  Well, it depends.  The general price range for a person age 65 might be anyway between $1800 to $3500 per year (depending upon the coverage).  Also, “guaranteed renewable” does not mean “locked in premium;” the cost of the policy can go up as an individual’s age and health status change.  Ouch, you might say?  Yes, it is expensive, but so is the cost of losing your life savings.  Thus, it is very important to carefully weigh all factors before making this important monetary decision.

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