Long-term care can be a very sensitive topic, whether you are talking about yourself or a loved one who needs long-term care. Unfortunately, the harsh reality of life is that a certain amount of dependency inevitably sets in with age. Besides, some seniors may require specialized care needs that their family is not always capable meeting. With this in mind, it is advisable to keep some money aside in case the need for long-term care arises.
What Is A Long-term Care Insurance?
A traditional health insurance is not designed to cover specialized care services that are related to aging. This cover is provided by long-term care insurance that allows you to get access to the best care at your home, a facility or even a community organization.
Long-term care insurance ensures you get reimbursed for daily expenses to the amount that you have opted for to get access to services that provide you assistance with daily living activities. There are different types of long-term care insurance and you can easily choose the care options and benefits that ensure you get access to the services when you need them.
This insurance will cover the cost of the following:
• Assisted living facility
• Nursing home care
• In-home care
• Adult day care
• Coordination of care
• Home modification
The cost of the insurance will vary based on your age, the amount of daily reimbursement you can avail, the number of days the policy will pay for the care and any other benefit that you wish to add to the standard benefits offered by the policy.
Who Needs Long-term Care Insurance?
Financial experts recommend that everybody should take out long-term care insurance. This is especially true for anyone who is nearing retirement age, although it is advisable that the policy should be purchased well before retirement.
Baby boomers who are retiring are in the high risk category. As they age, they become ill or find it difficult to perform daily living tasks. However, since long-term care is expensive and not covered by general health insurance or disability insurance, it best to buy the policy before you become ill or find it difficult to take care of yourself.
Tips To Make Long-term Care More Affordable
You can make long-term care more affordable by using these tips:
Start saving early for long-term care
It is advisable to maintain separate savings for long-term care. Do not mix this savings with your retirement nest egg. Opt for a health savings account as it is tax deductible. Earnings and withdrawals from this account are tax-free as long as you use the monies for healthcare.
Buy personalized long-term care insurance
Purchase long-term care insurance based on your family history. Checking your family history will give you a better idea of what conditions you are at high risk for so that you can choose your insurance cover accordingly.
Opt for a deferred annuity
As you age, the risk of getting diagnosed with chronic disease increases. You can hedge this risk by buying an advanced life deferred annuity, which allows you to pay a nominal lump sum amount so that you get assured benefits each month later in life.
Rein in your spending
Rather than spending money on frivolous items, learn to save. While this does not mean you should refrain from indulging completely, you must make sure you spend your hard earned money wisely. This way, you will always have money to fall back on when the need arises.
Saving money for your long-term care needs is an important strategy as you get older. It gives you and your loved ones much needed peace of mind knowing that financial constraints will not prevent you from getting the care you need when the time comes.
The information on our website is for your general information only. Palos Verdes Villa is not a financial advisor. While we have done our best to provide the latest and most accurate information, it is not a substitute for professional advice. Please consult with an independent, licensed financial expert to get the best advice for your unique circumstances.