Should I purchase long-term care insurance, or invest the money to pay for my long-term care?

I'm 53 years old and I'm thinking of purchasing long-term care insurance but I'm not sure I'll use it. Should I invest the money instead to pay for my long-term care? How much should I invest? What are pros and cons?

Investing, Insurance, Long-Term Care Insurance
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May 2018

Most studies I've seen suggest that someone who is 65 years old today can expect to spend up to $250k on health care in retirement. That number will grow at a rate of approximately 7% in years to come. Traditional long-term care policies are pretty expensive, if you can find a good one at all. Today, most long-term care insurance is offered as a rider on an annuity or life insurance contract. I like this better because if I don't need to access the funds for long term care, then the money will pass to a beneficiary. The insurance companies also offer an enhanced benefit for long term care meaning that if I put $250,000 into a life or annuity policy, I will have a $500,000 long-term care benefit for example. Depending on how much long-term care insurance you may need will determine which vehicle is best for you. 

Depending on how much money you have to invest will determine if an investment option is possible. There are some people out there that can self-insure against long-term care costs, but you would need to have a liquid net worth between $2 - 5 million. 

May 2018