Recently, I’ve been thinking about retirement – what it will mean and how I’ll manage. Retirement planning, in a sense, has been on my mind since I joined the workforce. And while it hasn’t always been possible to invest, I’ve tried when I could. I have a pension and can also expect social security, and have done what I could to maximize those benefits.
But it has also occurred to me that beyond managing my pension and social security, I should consider other things, such as whether I might one day need some sort of long-term care. It’s important to save money and budget planned and unplanned expenses, but all that planning would be meaningless if my nest- egg were to disappear in the event of illness – or let’s face it – plain old age.
Based on the statistics, it seems like a good idea to invest in a long-term care insurance policy. However, I want to be clear that insurance is not an investment, per se. Insurance is protecting yourself against an uncertain future, while investments are intended to appreciate and give you a return on your initial sum.
Protection Against the Future
Long-term care insurance qualifies as a protection against your future, and in that sense, it is an investment - and one that should be made wisely. It’s important to understand that long-term care insurance is too expensive to purchase when you need it most – that is when you’re older and your health is deteriorating. Also, some plans will disqualify you if you have a preexisting condition.
Plan Early, Benefit Later
Long-term care insurance is affordable and will be there when you need – if you think ahead and look into your options early. You should realistically assess all of your assets and income, and know beforehand whether you have family members who could potentially support financially, if necessary. Consider that usually you will have the option of lowering your amount of coverage if you plan early in life, but it can be increasingly difficult to raise coverage as you age and your health declines.
What to Consider When buying Long-Term Care Insurance
Make sure you fully grasp the limitations of the policy you are considering. Depending on the type of policy you choose, certain items may not be covered. It is important to ensure that you have planned for possible expenses that fall outside coverage, such as medical supplies, medications, and linens.
Aside from health and age, external factors can lower the cost of LTCi. Location will affect cost, so if maintain a proximity to family and friends, it is important be sure to understand the cost of care in your area. Additionally, you can see if your state offers a Partnership Program, a collaborative effort between the state and private insurance companies selling policies in that state and to state residents. A partnership qualified policy provides the purchaser with the ability to apply for Medicaid under a feature called “asset disregard.”
Consider your options with your family and then talk with a professional before making a decision. And remember, don’t buy out of fear and don’t buy when you are highly emotional; this decision merits a steady head and the ability to plan for contingencies.
