Long-Term Care Insurance

Long-term care insurance can help a family take on the cost of long-term care. Often, the amount the insurance policy pays out is insufficient to cover the cost of the individual‘s care needs. Even so, it can be extremely helpful in pursuing Medicaid planning to minimize the effect of a penalty for gifts.

Long-term care insurance has its pros and cons. It’s pros are that it can often help pay for care. It can also help someone pay for care in a facility that only takes “private pay.“ Private pay facilities do not accept Medicaid.

The biggest con to long-term care insurance is the cost. The premiums are usually very expensive, more so for women. The other con is that the benefits may be difficult to claim (some policies have elimination periods, independent medical evaluations, or limitations in the daily pay out).

There are new policies that are hybrid whole life insurance products. These entail purchasing a whole life insurance product that carries with it a long-term care insurance rider. That rider, if claimed, consumes the death benefit. So, you pay the premium and if you die, your family gets it as a death benefit. Or if you need long-term care, you use the policy during life to pay for care, reducing the death benefit. So, at least, if you purchase this product, someone will receive the value of your premiums. With traditional long-term care insurance, it is use-it-or-lose-it.

If you would like to further discuss whether long-term care insurance is a good fit for your budget, please contact us for a consultation. We can talk about the pros and cons and discuss other alternatives or how long-term care insurance could fit within a reasonable plan.