One option for paying for long-term care (LTC) is to purchase an insurance policy that covers those costs. Typically, traditional health insurance policies and Medicare provide very limited coverage. As a result, unless you can qualify for Medicaid, you must buy LTC insurance or pay out of pocket if you need a nursing home or home care.
You can buy a standalone long-term care insurance policy or a life insurance policy with an LTC rider that allows you to use all or part of the policy’s death benefit for long-term care while you’re alive. If you do not use it for long-term care, your beneficiary will get the death benefit.
Importantly, there are significant variations in policies between the same company and different companies. Policies may vary in what they cover when coverage is triggered, the benefit amount, waiting periods, and underwriting criteria.
As with all types of insurance, you may find that you are paying premiums for years and you never have a claim. However, if you do need LTC, your policy can keep you from using up all your savings.
Cost is a factor. Long-term care insurance is expensive and premiums can rise significantly over the years. However, some of this has stabilized. When such policies first started to be offered, insurance companies found they were paying out more than expected. Some insurance companies went out of business; others raised rates substantially and instituted stricter requirements for obtaining a policy.
It is recommended that you research insurance companies and find one that is highly rated and has a good track record with its policies.
You must buy LTC insurance before you have a health condition that disqualifies you or substantially raises your premium. Often, that means getting insurance in your 50s or 60s, long before you are likely to need it. Your health and family history should be considered in determining the optimal age.
It is best to talk with a long-term care insurance specialist who is knowledgeable about the companies and policies available and can assist you in evaluating your options.
You should also contact an experienced attorney. Our lawyers provide comprehensive Medicaid planning to help ensure clients protect themselves and their families in the event of death or disability.
Many states offer married individuals the option of filing for legal separation as opposed to divorce or dissolution of marriage. If you are unhappily married, you may wonder why there are two paths and which one you should pursue. Before you make a choice, you should...
When O.J. Simpson passed away recently, he left behind several unpaid creditors. Two high-profile creditors are the Goldman and Brown families who have unsatisfied civil judgments from their wrongful death lawsuits. A resident of Nevada, Simpson’s will has been...
Connecticut has a law that is unique among the states and is not widely known. The prejudgment remedy statute is a procedural tool that can protect plaintiffs and effectively resolve certain lawsuits before they have developed into maelstroms and significant time and...
The U.S. Federal Trade Commission (FTC) recently announced the adoption of regulations barring the use of non-compete clauses in employment relationships. This regulation, expected to go into effect this summer, would effectively void all employer-imposed restrictions...
A private split dollar arrangement is an estate planning strategy that allows individuals to set up an Irrevocable Life Insurance Trust (ILIT) providing money for heirs while minimizing gift and estate taxes. It is one of many tools that allow wealthy individuals to...