Benefits and Risks of Long Term Care Insurance

Long term care insurance pays for long term care in a nursing home or assisted living facility. Depending on the policy, long term care insurance may also pay for skilled nursing care and housekeeping help while the insured stay in their own home. There are several benefits in addition to risks to be considered when considering long term care insurance.

* You cannot get long term care insurance for a family member who is already in a nursing home. However, if one spouse is in a nursing home, the competent spouse can shop for long term care insurance for themselves.

* Suze Orman recommends getting long term care insurance by age 60 if Alzheimer’s’ disease runs in your family. Once diagnosed, you do not qualify for long term care insurance.

* Women pay a higher rate for long term care insurance than men, since they are more likely to use it and to require care for a longer period of time.

* The longer you wait to get long term care insurance, the higher your premiums will be.

* If you get long term care insurance and die, the premiums are not refundable in most cases.

* Never lie on an application for long term care insurance. Do not leave out details like early dementia, diabetes and other debilitating conditions. Not only is this fraud, but it can result in forfeiture of long term care insurance coverage regardless of payments already made.

* Balance the cost savings of getting long term care insurance through work with getting long term care insurance on your own. The loss of a job just short of retirement age can result in loss of your long term care insurance coverage through work just when you are too old to qualify for affordable long term care insurance.

* What does the long term care insurance cover? The higher the payout, the higher the premium.

* Does the policy require payments out of pocket for several weeks before the long term care insurance policy payments take over? If so, can you afford these payments? Know the waiting period and conditions in which the policy kicks in before you sign up for coverage.

* Do you expect a family member to provide care at the early stages of declining health? Can they be compensated from the long term care insurance plan? If you are discharged from a hospital and sent home with a relative and then need to go into a nursing home, have you voided your long term insurance coverage? Know the requirements for admittance before you need to enter or leave the hospital.

* Long term care insurance can prevent the impoverishment of a surviving spouse when the other requires long term care. However, you need to budget to cover the long term care insurance premiums throughout retirement to ensure long term care insurance is paid for up to the time it is needed.

It is wise to consider all of the potential benefits and disadvantages when choosing whether to take on long term care insurance. Each person’s situation is unique, and you will need to decide for yourself whether it is the right choice for your circumstances.