Is Long-Term Care Insurance Right for You

May 24th, 2021 by
long term care insurance

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People are living longer than ever.

This could mean you may need some extra help with everyday activities as you get older, receive an injury, become ill, or develop a cognitive impairment that would make it challenging for you or your family to take care of you.

The benefits of Long-Term Care Insurance go beyond what your health insurance typically covers to help you maintain your lifestyle, according to financial expert Suze Orman.

Long-term care may benefit families who want to protect their loved ones and their lifestyle. It can also assist individuals who may not have someone to care for them or significant assets to pay for these costs.

Related: What to Know About Retirement Expenses

People who bought policies when they were first available saw their premiums increase by as much as 50% in the last few years. This is due to the fact that in the first few years that long-term care insurance policies were available, many insurance companies mispriced the policies underestimating the expense of long-term care.

They quickly had to raise premiums in order to continue to offer these policies. Although this was a huge rise in premiums, consider that in 2019 the average cost of home aid was $52,000 per year, and this covered only 5 days a week, far less than the increase of the insurance premium.

Orman recommends that you start considering long-term care insurance once you turn 50 years old.

Related: Parents: How You Can Help Your Adult Children

Today, most insurance companies who offer Long Term Care Insurance have been able to control the expenditures of the policies that they issue and the huge rises in premiums are not as staggering as they have been.

Although that is not a guarantee as medical costs still continue to rise on a yearly basis. That said, it would be smart to research policies that you can afford and factor in an increase of up to 50%.

 


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