Do you need long-term care insurance?

From: REAP, LLC. | Retirement & Estate Advisors & Professionals

Like estate planning, long-term care insurance is a critical component of a financially secure future, but many people tend to put it off or actively avoid it. Planning ahead helps you avoid burdening your family and loved ones with the mental and financial costs of providing care. Read on for more about adding a long-term care policy to your overall wealth portfolio and what to consider along the way.

• Chances are high you may benefit from this coverage. Thanks to modern medicine, we’re living longer than ever. But that also means we’re more susceptible to cognitive impairment as we age, and that often makes daily activities difficult enough to require assistance. Hiring help to perform activities of daily living can be costly, particularly if conditions persist indefinitely, since Medicare payments cease if your stay in a skilled nursing facility exceeds 100 days. From Day 101 on, you will be responsible for all costs.
• Long-term care insurance policies aren’t getting better. The unfortunate reality is that this kind of coverage is an increasing loss leader for insurance companies. When long-term care is needed, it’s usually necessary until death, which means extended payout periods for insurance companies. Fewer companies offer long-term care contracts, and many of those that do have significantly increased premiums on existing policies. If you’re interested in long-term care coverage, consider shopping sooner rather than later.
• Buy early, or put an alternative plan in place. Those in their 30s and 40s with a few decades to spare may look into alternate ways of paying for long-term care. Having more options to address future needs, like a health savings account or long-term care annuities, can provide security and flexibility as the insurance industry continues to evolve.

Before biting the bullet on long-term care coverage, weigh your options to come up with the strategy that best fits your lifestyle and needs.

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