Monday, July 23, 2018

How much Long-term Care Insurance do you need?

Although major sickness can strike at any age, the chances of suffering from a long-term medical condition increase as you get older. Requiring long-term care in your senior years is bad enough. It is even worse if you feel that you are a financial burden on your family because of your medical bills then. A well-planned long-term care insurance will give you the financial resources to manage expenses arising from chronic or long-term debilitating sickness.

While an increasing number of people realize of late the importance of having long-term care insurance, they may not have the coverage they need. Long-term care insurance is not a one-size-fits-all type of policy. If you have questions on long-term care insurance or the right quantum of coverage, here are a few important facts to keep in mind.

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  • Resources cushion: Long-term care insurance should be part of your retirement planning. What assets and income sources will be available to you in your senior years? Can some of these be devoted to possible long-term care needs? What kind of insurance is needed to cover the gap between resources and care costs?
  • Place to retire: The place where you plan to live after retirement is a variable factor in arriving at the cost of care; it varies not only from state to state but also from city to city.
  • Duration of care: The duration of the long-term care will have a major impact on the cost and the policy you need. While it is not possible to predict an ideal duration, the typical care period is around 3 years. Genetic and hereditary diseases like Parkinson’s or Alzheimer’s can significantly increase the duration.
  • Health history: Your current and past health history and any recurring medical issues in the family over the last few generations would be important inputs. Those details would have a direct bearing upon the probability of long-term care need and the required duration of care, which in turn would help arrive at the type and quantum of insurance.  
  •  Inflation factor: Buying a long-term care coverage policy at an early age has the advantage of a low cost; but it may be many years before you may need the care and make the claim. Therefore, inflation should be factored into the amount of coverage that you opt for.

Planning: essential though unpleasant

Sentimentally, no one wants to think about prolonged medical care, especially in old age. Everybody would prefer instead to keep perfectly fit until the last breath. Nevertheless, it is too important a subject to ignore. Do not mistake long-term care for end of life care: they are two different things.

Long-term care is medical treatment and nursing for an extended period until you recover. End of life care refers to the care you need when you are in a terminal condition. Long-term care coverage affects how well and how fast you can be expected to recover.

Guidance of an expert

The financial situation of every person/family is different from every other. The factors outlined above will give you an idea of the kind of coverage you need. However, insurance is a complex matter: making mistakes and miscalculations is easy.

Discuss your insurance needs with an expert insurance agent who will be able to guide you to the right long-term care insurance policy at the right cost. It does not take long and the peace of mind you get will be lasting.

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