Long Term Care Insurance: Is it Worth It?

Many people are asking this question, “long term care insurance: is it worth it?” and everyone agrees that lacking a long term care insurance policy drains the accumulated money in retirement plans quickly. Do not lose much of your hard-earned retirement funds, which are worth years of labor, to the rising costs of long term care.


family icon

Retirement Savings can become Depleted Quickly due to Care Costs

According to John Hancock’s database, staying two years in a nursing facility’s private room in Indianapolis incurs almost $280,000. In Concord, the same setting and care duration costs $206,000. Meanwhile, you should have $165,000 to sustain four years of assisted living in Boise.

As a matter of fact, the most impoverished Americans do not worry much about expenses on long term care – thanks to federal support programs like Medicaid. You need to be concerned if your income is enough to get disqualified for Medicaid, yet still insufficient for paying out-of-pocket. As an advice, withdraw money from your retirement plan to supplement your premiums.


Long Term Care Insurance: Is it Worth It?

By owning a long term care insurance policy, you end up getting more money than you anticipated. One of the most useful riders that you can put into your policy is inflation protection. All that you need to do is give extra cash for premiums, and then wait. This rider accumulates more than enough money to help you stay at the top even during inflation.

Inflation protection is classified as simple and compounded. The specific type and percentage that you choose depend on your age and financial status. Ask credible insurance agents, elder lawyers, and other experts to find the best kind of insurance protection for you.

You and your spouse can benefit greatly from the shared care rider. It allows both of you to use each other’s insurance benefits in a convenient and effective manner.


Early Withdrawal from a Retirement Plan Comes at a Cost

Relying solely on retirement savings to pay for long term care presents an obvious challenge. Take as an example your 401(k) plan. You need to be aged 59 and ½ to withdraw money without that income taxation and 10% fine. An illness or debilitating injury that requires long term care can affect you before even attaining the age mentioned above.

You can apply for long term care insurance as early as in your twenties. Insurance payments from a policy do not involve age-based restrictions. In fact, you even get premium incentives for enrolling at a younger age.

Just remember that getting an insurance policy is not enough. You must acquire a policy that is relevant to your situation.

Required fields *