Getting Long Term Care

Who Should Buy Long Term Care Insurance?

Having too much money or too little, and chances are you don't need long term care insurance.

Long-term care insurance policy is not for everyone. For a limited population, long-term care policy makes sense as an affordable and worthwhile form of insurance. Buying long-term coverage should not cause financial hardship and force you to forego other financial needs. Whether long-term care insurance is appropriate requires a full financial analysis. For many people it is not a good idea.

Although the need for long-term care can arise gradually as a person ages and needs more and more assistance with activities of daily living, for most a stroke or a heart attack will be the precipitating need. Those with acute illnesses may need nursing-home care for a matter of months, while others may need care for years.

In any specific case it is difficult to predict who will need long-term care, but studies point out the likelihood of needing such care. In one study, it is anticipated that 43% of those who turned age 65 in 1990 will enter a nursing home at some time during their life. Of those who live to age 65, nearly 1 in 3 will spend three months or more in a nursing home and 1 in 4 will spend one year or more in a nursing home. Only 1 in 11 will spend five years or more in a nursing home.

Women outnumber men in nursing homes according to this specific study. Thirteen percent of the women as compared to 4% of the men were projected to spend five or more years in a nursing home. And obviously the risk of needing nursing home care increases with age.

After assessing the odds that you will need long-term care, consumers must stringently analyze the reasons for a policy and the ability to pay for it for the balance of a person's life. It makes no sense to buy a policy unless it can be paid every year until death and far too many policies are cancelled by policyholders on fixed incomes as they grow older and their premiums increase accordingly.

Buying a policy is a function of your age, health status, overall retirement objectives, income and wealth. If the only source of income is a minimum Social Security benefit or Supplemental Security Income (SSI), do not purchase a policy. If paying utilities, food or medicine stretches a budget; this person should not purchase a policy.

Long-term care policies are only for people with significant assets they want to preserve for family members, to assure independence and not burden family members with nursing home bills. Never buy a policy if paying the premiums will be a problem. If you have existing health problems that will result in the need for long-term care, such as Alzheimer's or Parkinson's disease, no company will sell you a policy because the probability of losses exceeds the probability the carrier will earn a profit on its contract with you.