Not sure why Long Term Care Insurance (LTCi) is a good idea? Here are reasons people use for failing to obtain LTCi:
The only intelligent way to accomplish this is to have separate long-term care savings. If you don’t do this, and do need care, your life savings will have to be drawn upon to pay care costs. Self-insuring may cause you to spend money you need to live on during retirement; or you want to leave a legacy with. It may also result in less freedom/fewer care choices and unnecessary stress for your spouse and family. According to Genworth’s 2014 Cost of Care Survey, nationally averaged private room nursing homes average $240 per day.
I’ll self-insure (2)
You will have to save very aggressively to accumulate what LTCi will generate. Call me and I’ll walk you through the arithmetic to prove this, using all of your own numbers and assumptions.
The government pays for care
The government doesn’t pay for the broad range of care options many people want.
If you plan on living a long life, waiting to buy LTCi will not save you money. In addition, if your health declines, LTCi may cost a great deal more, or you may not qualify for it at all.
I won’t need care/LTCi is a rip-off
If you believe this, you’re at odds with every nationally recognized financial expert I know of. If you’re middle class, even our federal government and Dear Abby advise purchase of LTCi. The odds are high that you may eventually need care, and care costs can be catastrophic.
My kids will take care of me
You don’t believe this, do you? Do you want to burden them?
I don’t need an insurance agent; I’ll do it myself
Then why haven’t you done this yet? LTCi is/has a few too many moving parts for the typical person to tackle alone. There’s so much to it that often people feel overwhelmed by the task, and get paralysis by analysis. I’ve seen people who have a file folder stuffed with LTC brochures. Then a stroke or health issue comes quick like a thief in the night. They thought they had a policy, but in reality they shopped and shopped and never pulled the trigger. Now it’s too late and there are often devastating consequences to the family. This is ALL TOO common, unfortunately. Some people do acquire LTCi on their own, but never quite develop a full sense of confidence in their decision. If you’re going to spend the money that LTCi costs, you should be absolutely confident about what you’re doing. You should have a plan you understand well, that does exactly what you want it to do, and fits into your budget. In much less time that it would take for you to try to plod through your LTCi decision on your own, you could have a more pleasant and less stressful experience working with me. National media and national experts recommend that you work with an LTCi specialist. My clients agree.
LTCi Is Expensive
It doesn’t have to be. Rates vary depending on your age, marital status, health, and what features you choose. The big picture is that if you need care, it generally takes just a few months or less to recoup the entire premium you paid in.