Covering these costs can be a major burden, which is why products like long-term care insurance exist. However, long-term care (LTC) policies are often viewed negatively because they may include unexpected limitations that make it hard to get the care you want paid for.
So does that mean you should not buy one? Say, for example, that Ned is 55 and serious health issues run in his family. He’s trying to decide whether to buy a policy now, before premiums become prohibitively expensive, or whether he’d be wasting his money.
Experts have weighed in to help Ned decide.
Long-term care insurance can be a good form of protection
Around 3% of Americans aged 50 and over have purchased long-term care insurance, even as policies have been evolving to better meet the needs of patients, according to LIMRA Research.
“Today, there’s a full suite of products from those with chronic illness riders all the way through to the traditional stand-alone LTCI policy that’s available to address different people’s needs,” Karen Terry, corporate vice president and director of LIMRA Insurance Research, said to LIMRA. Terry also said the stand-alone market has changed to address issues that led to significant premium increases and reputational damage in the past.
With the evolution of policies, many experts now agree they can be an appropriate purchase in the right circumstances.
“It’s not always a scam if it’s right for you personally,” Blaine Rogers, an attorney who specializes in insurance bad faith cases, told Moneywise. “Worth buying will depend on a few things: Age, health, financial status, premiums, and the overall coverage.”
However, if Ned wants coverage, he needs to act quickly. “Long-term care insurance isn’t a scam, but waiting too long can make it expensive or impossible to obtain,” Patrick Simasko, an elder law and financial attorney, told Moneywise. “You cannot buy homeowner’s insurance when the house is already on fire, and the same concept applies here.”
Since Ned’s family has a lot of medical problems, the big question is whether Ned himself is healthy enough to get benefits. “If you’re older and you have health issues, you’re not going to be able to get long-term care insurance,” said David Talley, founder and executive of Talley Wealth. “Carriers get increasingly cautious as you age, and once there are real health problems, it stops being an option.”
Simasko suggested buying as young as possible to avoid this problem, before you develop health problems that would push premiums higher or prevent you from getting coverage entirely. This may not seem like something you want to spend money on at a young age, but it’s important to keep costs down.
