Long-term care is a terrible danger to the life savings of many senior citizens. The fear of losing hard-earned assets, possessions, and real estate property is a huge motivation for seniors to search out ways to protect themselves and their families from enormous long-term care costs.
Long-term care insurance, which is supposed to provide coverage if the senior experiences an expensive medical condition that requires long-term care in an assisted living or nursing home, may seem like a wise safety net. However, not all long-term care insurance policies are the same. As a Tampa elder law attorney, many that I have reviewed on behalf of clients are not worth the aggravation and expense. If you are thinking about purchasing a policy for yourself or a loved one, I encourage you to investigate the following:
How much coverage does the policy provide?
Surprisingly, the average nursing home stay here in the United States is only six months. While this, of course, varies from person to person, it’s something to keep in mind as you are evaluating the coverage provided under the plan. If the bulk of coverage is dedicated to skilled nursing care and nothing else, it may not make much sense in the long run. Furthermore, many long-term care insurance policies lapse before the beneficiary ever makes it into a nursing home. And, if benefits are paid to the nursing home through the insurance policy, the amount of coverage offered ends up being much less than the actual cost of care.
Nursing home vs assisted living coverage
In the majority of cases, we recommend that our clients steer clear of policies that do not cover assisted living facilities. It is far more likely that you will stay in an assisted living facility for a greater amount of time than you would stay in a skilled nursing facility. As noted above, the average stay in a nursing home is 6 months and is incredibly expensive – a stay in an assisted living facility could last several years and is often quite a bit cheaper when you compare it on a monthly basis to a nursing home.
Long-term care insurance as a safety net
Long-term care insurance may be a good decision if you look at it in terms of a safety net rather than your sole source of paying for long-term care. Most experts agree that long-term care insurance is a worthwhile investment only if your premiums amount to less than 5% of your monthly income. In addition, you must also keep in mind that once you retire, your income will drop – and your premiums will rise.
If you have any questions about whether long-term care insurance is right for you, or if you’d like to have your long-term care insurance policy reviewed to make sure it provides the correct coverage for your situation, please call our Brandon estate and elder law firm at (813) 438-8503 to set up an initial consultation.