During our previous discussion, we took a look at who qualifies physically for long-term care insurance. Today let’s take a look at who qualifies financially.
You can probably guess that this type of policy is not the most affordable to purchase.
The majority of our population will need long-term care, thanks to the negative effects of aging.
Long-term care, whether in the form of a nursing home, assisted living, or in-home care will be a huge expense.
What you and your insurance provider should discuss is if your nest egg is the right size to justify the need for purchasing a long-term care policy.
Some experts recommend that you should spend no more than 5% of your income on a long-term care policy.
With a bit of math, you will be able to decide if that fits your budget or not.
Geraldine was a widow whose husband had left her a comfortable home and a bank account sufficient to take care of her needs.
Gerry and her insurance agent discussed the option of purchasing a long term care policy.
Both agreed that although Gerry had a comfortable savings account, her fixed income did not fit the recommended cost of 5% percent or less.
Gerry would probably face selling her home and using up her savings before qualifying for government aid to kick in and take over her long-term care costs.
She decided to go with that plan, as her two children were out of college and had secure jobs.
Nancy was also a widow, but her financial situation was a bit different from Gerry’s.
Nancy was left with a generous inheritance from her parents as well as some hefty investments from her late husband.
Nancy really wanted to make sure her three children were left with an inheritance such as the one she had received.
Nancy’s insurance broker worked with her to find a good policy for long-term care that would make it affordable to stay in a care facility of her choice while not draining her savings and investments.
These two scenarios are just to give you an idea of how variable each situation is.
You know your own unique financial position and will need to determine if the investment of a long-term care policy would be a benefit to you.
The time to think about it is before you or your older loved ones are 65 years old.
If you are approaching 60 soon, bring up this topic with your insurance provider.
Together you can research the options available to you.
If you don’t already have a local insurance agent/broker to work with, give me a call.
I’d love to talk to you about the subject of long-term care and the choices available to insurance customers in California.
Bruce Sackrison is an insurance property and casualty broker affiliated with Professional Insurance Associates. He is at 707-931-0186 or firstname.lastname@example.org.
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