The Caring Corner®
Long Term Care Insurance: A Safe Bet?
For a while it seemed like long-term care insurance was a essential element of planning for aging. Many of us are going to need long-term care when we get older, and the cost can be prohibitive. Adult daycare averages $18,000/year in the United States. Nursing homes average $90,000 per year. And personal one-on-one care provided on a 24/7 basis can cost twice that much. Long-term care insurance conceptually is a great product. You buy a policy and it covers some or all of your expenses if you need assistance. Many policies in place today were sold years ago and insurance companies failed to appreciate how long people would live and how much care they would need. Several companies exited the market because it proved to be unprofitable.
Today, long-term care insurance policies do not make the same economic sense. This means that there are fewer opportunities to shop around, and the underwriting process can be much more involved and time-consuming. Some financial advisors are advocating the notion of self-insurance. Rather than invest in an expensive policy with lots of conditions around the release of benefits, put money aside regularly and invest so you have a pool of assets to use in the event you need care.
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