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| Yes | 54% | 7 votes | Total: 13 votes | |
| No | 46% | 6 votes |
Yes
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Add to FavoritesSome people think that Long-Term Care insurance is unnecessary. They think that all they have to do is transfer their assets to their beneficiaries and let the government take care of them.
There are some problems with this type of thinking. First of all, I question the morality and legality of hiding assets. I also wonder why you would want the government to take care of you. You see how well they handle everything else. Having Long-Term Care insurance will protect your assets as well as help get you into a private healthcare facility where they will probably do a better job of taking care of you.
I also wonder why people don't want to pay for their long-term care. They realize that they have to pay for a meal if they go to a restaurant or get their car fixed or get their hair cut. It's the same basic principal with healthcare. You are getting a service so you should be willing to pay for it.
When should you take out a policy? It is unwise to take out a policy when you are 40 years old because you most likely won't need health care for a long time. When you get into you mid to late 50's would be a good time to get insured. Statistics indicate that you most likely won't need a healthcare facility until sometime after the age of 60.
You have various options as to what type of Long-Term Care insurance that you can get. A simple 3 year basic policy will probably only run $60-$70 per month. But you don't really want that because those policies usually have little or no inflation protection. There are policies where you can piggy back with your spouse. You can have a 4 year policy and your spouse a 4 year policy. If your spouse has to go into a healthcare facility for 6 years, they can use 4 years from their policy and 2 years from your policy. Of course that means that you only have 2 years left so that is kind of risky.
Something else that you need to be aware of is and inflation clause. Some policies may have an automatic 5% inflation rate each year for your coverage. The problem with that is healthcare costs are rising faster than 5% per year.
In my opinion you should get at least a 10 year policy and preferably a lifetime policy. Be sure that it has an inflation clause that says the policy will cover you regardless of the inflation rate. That way if healthcare costs rise at a 12% rate, you will still be covered. Granted, this type of policy will be more expensive but it will be well worth it if you ever need long-term care.
So are Long-Term Care policies necessary? I think if there is anyway you can possibly afford it, definitely yes.
Learn more about this author, Art West.
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No
The subject of long term care insurance coverae is quite an emotional one. This is an acknowledged reality in spite of the fact that most people recognize their vulnerability to health care expenses as they age. It is not a proper place for emotion, however, as financial considerations should dominate the decision making process.
The emotional response typically is denial - conversation closed. Whether or not this turns out to be a wise decision remains to e seen, Rejection of the use of insurance does not avoid the other cost - always having to wonder if the nasty statistics will include you at some point in time as a contributor to the business of the health care community.
The problem that I see with the idea of buying long term care insurance is threefold;
1. It is very difficult to be assured that your premium costs will not rise, or that you coverage will be enough
2. You may never need the coverage. (You may be the lucky gambler, and all the money you pay for insurance will be wasted.)
3. There is a better way.
All the arguments in favor of carrying insurance are recognized as legitimate, I would argue. However, it should be understood that there is a way that problem 1 and 2 can be negated. Here is the 'better way', you may be able to accomplish:
Use your life insurance! This is possible if you carry life insurance with an accelerated benefit provision for long term care. Chances are your present life insurance has no such provision, but modern contracts are becoming more widely available that allow you to access the death benefit while you live. Typically, you can have up to 2% of the face amount paid to you if you need home care or facility care. The benefit will be triggered by the same health considerations as a long term care insurance policy, and will last as long as you have not used up the face amount of insurance. Premiums do not rise, and you are eligible for benefits to be paid wherever you may be located, as long as you remain disabled.
Best of all, if you are the lucky person who does not use the benefits, the entire face amount is payable to your heirs as a tax free death benefit.
If you wish to include a charity in your planning, you can learn more by going to www.cga-advisor.com to learn how to get a tax credit to help pay for the insurance premiums for the life policy. All of the above discussion assumes that you are open to investigating working with insurance companies. You will be well served by having a competent agent whom you trust.
Learn more about this author, Robert Zimmerman.
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