The Value of Long Term Care Insurance


Long term care insurance is an important financial planning tool. Evaluating the pros and cons of long term care insurance requires your input. Consider the topics below to decide if the purchase of long term care insurance is a wise financial decision for you and your loved ones.

Predicting the future of your health is challenging. No one can accurately predict the future. According to surprising statistics from AON Hewitt’s actuaries, you’re more likely to need long term care if you enjoy a healthy lifestyle today.

Long Term Care Insurance: Healthy People

That’s because healthy people are more likely to live to ripe old age and need assistance or care in later life. Home care needed to help an elder perform the normal activities of daily life, such as meal planning, grooming or toileting, is expensive.

  • Long term care insurance can help you stay at home and maintain an independent lifestyle for years longer than individuals who didn’t think ahead.

Longevity tends to run in families. A look at your family’s medical history can help you to decide on the personal value of long term care insurance:

  • If your parents (and grandparents before them), siblings, aunts, and uncles are healthy and long-lived, care later in life may be needed if a family member can’t assist them.
  • Long term care insurance can reduce burdens on family caregivers. Even if a child plans to care for aging parents, he or she may need to keep a job or care for a family.

If you don’t eat properly or take regular exercise, statistics show you’re likely to die earlier from complications of heart disease or cancer. The only positive of an unhealthy lifestyle is that you’re less likely to need long term care insurance than an active, fit person.

Long Term Care Insurance: Your Assets

If you need care later in life, spending your own money or liquidating valuable assets to pay for care may be required. If you haven’t saved enough, is a future of state dependency something you can live with?

Living to old age with enough resources can be a gratifying experience. You’ll live long enough to welcome grandchildren or great-grandchildren if you have children now. If you’ve worked and created through life, you can continue to do so as an independent older American.

As you age, some health problems are likely. In your 80s, you’re 50 percent more likely to have hearing and balance problems than the average 40 year old. Even if your mind is as sharp as ever, getting help with housecleaning, cooking, bathing, and dressing will be needed. If the idea of moving in with a sibling or child isn’t palatable, deciding how to pay for future assistance is a timely decision:

  • Depending on your location, a full-time homemaker or certified nursing assistant (CNA) costs up to $10,000 per month.
  • A traveling nurse or in-home medical care costs more. Even if you’ve saved for retirement, you might not have enough money to pay for long term care without insurance.

Long Term Care Insurance: Cost vs. Coverage

Paying long term care insurance premiums today buys peace of mind about the future. Many long term care insurance policies have adjustable features. You can purchase a basic policy that provides a reasonable level of future coverage or buy a policy with lots of extras.

Of course, if you elect to purchase long term health insurance, you are likely to pay premiums without using coverage for years. In that way, purchase of long term care insurance is much like owning any other insurance policy:

  • If you own a home, you must have a homeowner’s policy. If you never submit a claim, you still ascribe value to this policy.
  • Similarly, if you’re spry and solid into your 80s, 90s, or 100s, the cost of long term care insurance helped you prepare for these golden years.

According to the National Institutes of Health, the probability of encountering disability in two or more activities relating to daily life or suffering cognitive impairment is almost 70 percent for Americans aged 65 and older. Extrapolated to your life, you’ll either require long term care or you won’t. It’s a big gamble to assume your odds of disability are zero.

Long Term Care Insurance Value

The value of long term care insurance is all about giving yourself the most options. Living a long and independent life without undue financial or psychological stress is possible if you plan for the possible future now. Asking a family member to care for you in old age may be an uncomfortable arrangement for both parties.

Paying another insurance premium can be challenging today but knowing you’ve implemented a financial plan for your future can reduce your concerns about aging. You and your family won’t experience emotional and financial stress if you need long term care.

To know the value of long term care insurance for you, create a plan for your future. Discuss your ideas with family and know their willingness or ability to help if assisting you in the future is necessary.