Long Term Care Insurance

Long Term Care Insurance helps cover the cost of long-term care services. The expense of long term care can quickly destroy the best-laid retirement and financial plans. That’s why long term care insurance plays an important role in your overall financial plan.

Coverage protects your assets by transferring the risk of potential costs such as hospital stays and home nursing care to an insurer. Coverage also helps your family by relieving them from acting as the primary caregiver.

Here are some tips for finding an affordable policy:

1. Avoid purchasing a lifetime policy. Unless a certain illness runs in your family, you’re unlikely to need coverage for more than 5 years. The American Association of Long-term Care Insurance says that a three-year benefit policy is sufficient for most people. But if you do have a history of chronic disease, you may want to purchase extended coverage but not lifetime.

2. Buying when you’re young and healthy saves money. Premiums rise as you age. The younger you are, the cheaper the premiums. But your premiums can increase over time.

3. Choose an extended elimination period. Coverage usually begins after a 30-90 day waiting period. The longer the waiting period, the cheaper the premiums.

4. Lower the daily benefit. Consider paying a portion of the daily benefit out of pocket. You can insure for the maximum coverage, but that will increase your premiums. A lower daily benefit means lower premiums.

5. Choose the best inflation protection. Inflation protection increases the value of your benefit over time. The method of protection you choose affects your premiums.

Your premiums are possibly tax-deductible. Talk with a CPA about your options.