How To Select A Long Term Care Insurance Plan

Updated for December, 2021

Long-term care insurance is a type of coverage that is intended to cover eligible personal and custodial care expenses that can help you remain happy and healthy in the comfort of your own home. For example, a long-term care insurance policy may cover the costs related to having a caregiver stop by your home once a day to assist you in preparing meals, maintaining your home, taking your medications, and completing other everyday tasks. These are expenses that most Medicare and Medicaid plans will not cover, so for those who wish to remain at home throughout their retirement, this is a coverage option worth exploring.

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On the other hand, long term care insurance can be rather expensive and is not ideal for everybody. Purchasing this type of insurance at a younger age can help you save on your premiums, though you may also want to consider alternate options, such as rollover funds from a health savings account or pension money to help you cover these costs as needed.

If you already have a life insurance policy, you might consider “hybrid” long term care coverage.

Long term care insurance is one of those things you hope you never have to use, but having it can certainly provide you with added peace of mind—especially if you want to remain living at home for as long as possible after retirement. There are many coverage options to choose from, including coverage for basic in-home care for healthy living, memory care, and full nursing home coverage. Furthermore, if you already have a life insurance policy, you might consider “hybrid” long term care coverage, which allow you to combine your life and long term care policies. The main benefit of doing this is being able to lock in your rate.

The main advantage to long term care insurance is being covered for any in-home or nursing home care you may need to live an independent and healthy lifestyle as you age. However, it can be pricey, especially if you wait to buy until you’re older. The younger you buy the policy, the more you’ll save. Still, long term care coverage rates can fluctuate over time (unless you have a hybrid policy, which should allow you to lock your rate in).

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With so many options, it can be difficult to determine which option is best for you. Generally, you should begin by determining the maximum dollar amount of coverage you see yourself needing each month. This usually ranges anywhere between a few thousand to more than $10,000 per month, depending on the level of care and how frequent the care is needed. From there, subtract the amount you can afford to pay out-of-pocket by the total monthly cost. This is the amount of monthly coverage you’ll need to buy.

If you have a spouse, you may also be able to save on your monthly premium by purchasing a joint policy. Also keep in mind that long term care insurance premiums can be tax deductible in certain circumstances.

Overall, long term care insurance is a wise investment, and the sooner you buy, the less you’ll pay. Be sure to consider this financial option as you plan for your future.