3 long-term care insurance moves to make this summer
The summer season is just a couple of weeks away. This summer you may find yourself more focused on your finances. Expenses continue to rise and it's important to be prepared in today's inflationary economy.
One such expense that you shouldn't just consider, but that you should prepare for, is the cost of long-term care as you age. That cost can be exorbitantly high - as high as six figures per year in some cases - and most older adults will face it at some point.
The good news is that long-term care insurance can make covering that cost easier. If you don't already have an adequate policy in place, there are a few long-term care insurance moves you should make this summer.
Chat with an expert about your long-term care insurance options now.
3 long-term care insurance moves to make this summer
Long-term care can be expensive. But, if you plan for that expense, you'll be prepared if your need for care arises. Here are three long-term care insurance moves to make this summer that will help you plan for the cost of your care:
Buy it now
"Summertime is the perfect time to consider long-term care insurance," explains Virginia Barausky, national director of sales for The Pinnacle Group, a firm that helps financial advisors and consumers plan for long-term care needs. "As we celebrate independence day, it reminds us how important our physical independence is. Most clients want the choice to remain in their homes and have providers help them in the comfort of their homes when they need long-term care. A long-term care policy this summer can help assure you maintain your dignity and independence."
But, that's not the only reason you should purchase coverage this summer.
"The biggest barrier to entry in long-term care insurance is price. And as you wait, premiums get more expensive," explains Keith Bercun, regional sales director at the financial services firm, OneAmerica Financial Partners. But, age isn't the only reason waiting can cause long-term care insurance premiums to rise. "Carriers often make the policies more expensive as they release new product versions. So, as you're waiting, it's not just your age affecting the premium, it's the cost of the policy."
But, Bercun says there's an even bigger risk to waiting to purchase coverage. "The biggest cost associated (with waiting) is the ability to qualify. Generally, as you get older, you become less and less insurable."
Buy long-term care insurance now before it's too late.
Consider inflation protection
As inflation persists, it's putting a spotlight on the rising cost of living. So, it's important to consider some form of inflation protection when you purchase long-term care insurance.
"20 years ago I was writing $50 daily benefit policies because the cost of care was $50-$100 per day," says Rhonda Bills, CLTC, instructor for Certification for Long-Term Care, a training company that certifies long-term care insurance agents. "Fast forward 20 years later we are talking about $200-$300+ daily benefits. Healthcare costs go up annually."
In some cases, an inflation protection rider may be the best way to combat this price growth, but, "with some policies, inflation protection has become so unbelievably expensive that there's better ways to insure that you're getting" the coverage you need, says Bercun. "And, a lot of that is just front loading it. By putting more upfront and starting out with a benefit out of the gate that will give you what you need, it can actually be less expensive. And, in doing that, very often, you will get more cash value and death benefit out of the policy."
Make sure your coverage matches your plan for aging
It's also important to make sure that your policy covers the type of care you're looking for. The good news is "policies are comprehensive today, which guarantees you can use the policy for home care, community care settings such as adult day care or hospice, therapy services, and facility benefits," says Bills.
But, it's also important to keep in mind that different types of long-term care insurance policies are fitting for different situations. For example, you may want to choose a hybrid policy that offers cash benefits "if you want to pay friends, family, or retired caregivers," says Bills.
In any case, the best way to make sure you get a policy that fits with your plan is to "work with a qualified agent or advisor that can lead you," says Bercun. "With long-term care, there are so many options to choose from." But, a qualified agent will "sit down with you, go through your unique financial portfolio, where you live, your demographic, your age, what you want from your long-term care plan and strategy and help you define what's important."
The bottom line
This summer is a great time to purchase long-term care insurance. And, when you do, be sure to consider ways to make sure you're protected against persistent inflation and to ensure that your coverage matches your plan for aging. Chat with a long-term care insurance expert now about your options.
