What is Your Greatest Risk?

Long Term Health CareMy grandmother and my mother-in-law each lived to age 96. Many of us know women who lived to age 100 or later.  A lot of women are afraid of a stock market decline, but because we are living longer than ever before, there’s actually something that could be more devastating to your hard earned wealth—the cost of long term care.

Paying for long term care can be expensive.  Having long term care insurance may allow you to elect where you receive your care, the type of care you receive, and who provides care to you. Many LTC insurance policies pay for the cost of care provided in a nursing home, assisted-living facility, or at home, but the cost of coverage generally depends on your age and the policy benefits and options you purchase. And premiums can increase if the insurer raises its overall rates. Even with LTC insurance, you still may have some expenses not covered by LTC insurance.

Here are some things to watch out for when buying a LTC policy:

  • Not all policies provide coverage for care in your home, even though that’s where most care is actually provided.While the cost of in-home care may be less than the cost of care provided in a nursing home, it can still be quite expensive.
  • Most policies allow for the selection of an elimination period of between 10 days and 1 year, during which time you are responsible for payment of care.
  • The LTC insurance benefit is often paid based on a daily or monthly maximum amount, which may not be enough to cover all of the costs of care.
  • While lifetime coverage may be selected, it can increase the premium cost significantly, and some policies may not offer that option. Another option that can be valuable, but also increase the premium expense considerably, is cost-of-living or inflation protection, which annually increases the daily insurance benefit based on a certain percentage.
  • Most common LTC insurance benefit periods last from 1 year to 5 years, after which time the insurance coverage generally ends regardless of whether care is still being provided

Protecting wealth can be as important as building it. Insurance is one of the basic elements in a well thought out financial plan.

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