A:

Long-term care insurance (LTCI) covers the risk that individuals may need medical and custodial care, either at home or in a skilled nursing facility, at some point in their life. Most workers wait to purchase an individual policy as they approach retirement or their group employer benefits are about to expire. Surprisingly (according to the Journal of Financial Planning, February 2009), nearly half of all group long-term care claimants in 2007 were under the age of 65. Costs ranged from $19,296 for in-home care in Louisiana to $177,634 for full-service nursing home care in Alaska. On average in the United States, you could expect nursing home facility care to run between $60,000 to $100,000 per year.

The cost of long-term care facilities and care has and will become even more expensive as our population continues to get older. One way to protect your family assets from being eroded by these costs is to purchase a long-term care policy. Even if you feel that you have sufficient assets saved to cover these costs, you may want to reconsider the benefit of having a LTCI policy as a hedge to protect your estate. If you or a parent are admitted to a nursing home facility at $80,000 per year, your assets would be depleted by $400,000 for a five-year stay in a facility.

When looking at the cost of LTCI it's similar to many other types of health and age related insurance coverages. The older you are and your current condition of health will play a huge factor in the size of your premium payments. Consider shopping for coverage while you are in your early 50s and in good health, you'll be able to lock in a cheaper premium and not have to worry about being denied coverage in the future for existing health issues.

Read Long-Term Care Insurance: Who Needs It? for more.

This question was answered by Steven Merkel.

RELATED FAQS

  1. What are the financial benefits of retiring in Panama?

    Discover the many financial benefits conferred to U.S. citizens who elect to make their retirement home in the Central American ...
  2. What are the financial benefits of retiring in the Philippines?

    Read about the many financial benefits of retiring in the Philippines as an American expatriate, including low health costs ...
  3. How can I get a 'pensionado' visa to retire in Costa Rica?

    Read about how you can obtain a pensionado visa to retire in Costa Rica, including what kinds of applicants the Costa Rican ...
  4. How does life insurance help high net worth individuals protect their businesses ...

    Explore how life insurance can help high-net-worth individuals protect their businesses and personal wealth by protecting ...
RELATED TERMS
  1. Corridor Deductible

    Expenses that are paid by the insured in excess of an insurance ...
  2. Insurance Consortium

    A group of businesses or organizations that join together to ...
  3. Mobile Health

    Mobile health is the practice of medicine using new mobile technologies.
  4. Automatic Premium Loan

    An insurance policy provision that allows the insurer to deduct ...
  5. Blanket Medical Expense

    An insurance policy which provides coverage for all medical expenses ...
  6. Cestui Que Vie

    The individual who is the beneficiary of a trust or insurance ...

You May Also Like

Related Articles
  1. Mutual Funds & ETFs

    Top 7 ETFs Designed for Retirement Income

  2. Entrepreneurship

    Why Small Business Owners Need Financial ...

  3. Investing Basics

    Which insurance companies pay the highest ...

  4. Stock Analysis

    How UnitedHealth Group Makes its Money

  5. Economics

    How Big Data Has Changed Healthcare

Trading Center