Basics of Long Term Care Insurance

The decision to purchase a long-term care policy is often an emotional decision, and in all honesty, it should be. From the perspective of the person covered by the policy, he or she is taking steps to not only protect the assets of their estate for their family, but also to protect their family from the harsh realities of comprehensive elderly care.

Long-term care is insurance that protects your assets and your family’s assets in the event that you are confined to a nursing home or assisted care facility. The raw cost for nursing home care and in-home care can drain the assets of almost any estate. In many states, the average cost of nursing home care is at least $5,000 per month. In certain urban areas, the cost is much more.

A long-term care policy can provide a monthly benefit from $1,000 up to $10,000 to cover nursing home, assisted living and in-home care costs. Anyone who is close to 50 years old should strongly consider getting a long-term care policy. The cost of the policy is very affordable if you get it while you are under 60, and many companies offer a return of premium option, which can reimburse the lump sum of premiums paid into the policy.

A very important detail of a long-term care policy is the inflation protection rider. This rider takes inflation into account and adjusts the monthly benefits accordingly to compensate. Most insurance companies offer a couple different inflation protection options with different levels of protection. Simply put, no one should consider buying a long-term care policy without an inflation protection rider.

The rising cost of healthcare has had such a dramatic impact on the costs associated with in-home care, assisted living and nursing homes that many financial planners have integrated long-term care policies into their estate planning packages. Doing so provides a more comprehensive plan of preserving and protecting the assets of the estate. What many do not realize is that traditional health plans and Medicare provides extremely limited benefits for nursing homes, in-home care and assisted living facilities. Anyone who is fifty years old should consider obtaining a long-term care policy. When bought at this age, these policies are usually quite affordable; definitely more affordable than paying for nursing home care out of pocket.