I never realized how expensive long-term care is. The average is $70,000 a YEAR! The author says she pays $5,000 a year for her long-term care in the future. I think this is a pretty big amount, and I don’t know if it’s justifiable. My family has never used long-term care, at least I don’t think. Usually our family members just take them in and take care of them, so I guess that’s another reason that I’ve never really thought about long-term care.
So the author would be paying $5,000 a year, probably for 30 years since she’s only in her 40’s. I feel like just putting the money in some sort of investment would be better.
There are a lot of questions that need to be answered though before people should consider this. Sorry if this was said in the article, but I don’t believe it was.
- What if you don’t use the policy? Such as with you having a better support network than you thought, or by some chance you pass away earlier?
- What if the policy is no longer valid in the future (such as the insurance company no longer exists, or no LTC facility will accept the insurance?
- How long would this LTC policy be for? If you became sick, would you only be able to use LTC for say 5 years, or longer?
In the end, I’m not sure how I feel about LTC insurance. If it was cheaper, I think I’d give it more thought when I’m older, but for $5,000 a year, I think that’s way too much.
What’s your input on LTC?
I agree with Michelle, I am not sure how I feel about it either. I recognize nearly all financial planners strongly recommend LTC insurance, even the ones don't make a commission from the sell of such policies. To exercise the policy benefit, often there is something like 2 major life functions that one must be unable to perform in order to collect. Can you imagine negotiating with an insurance company and filling out paperwork when you are missing two major life skills? That is a daunting thought. And yes, forecasting or expecting financial viability of an insurance company 20, 30, or 40 years from now – that is the whackiest aspect. That being said I did purchase a policy this year. I went through a lot of iterations in my mind of what the value vs cost was. I decided on the lowest daily allowance but with high cost of living increase percentage, with an idea that I am less likely to use it soon than I am later, and less I use it now, the more the compound interest will grow the policy's daily benefit over time – when I may be likely to use it. (I know it is not a perfect strategy). But like a lot of insurance products, I am not sure how I feel about it either, but all I would say all smart insurance purchases should be to create some form of a safety net in catastrophic loss situations. I mean, I hope I don't have to use my car, home, casualty, property or health insurance but at least they are there (I hope) to back stop an enormous financial loss.
No thanks, not for me, I'll take my chances. My grandma died in her own bed of a stroke aged 95 and her mother lived to age 106 and also died at home. I'm hoping I'll be able to look after myself as I age, if not, just shoot me!
Michelle P says
I agree with Jane, just shoot me if I'm not able to look after myself!Thanks Lifetour for your comment. I agree with what you've said. The comfort of knowing that everything would be fine later in the life would ease a lot of headaches.
The cost should depend on what age you start purchasing it, and it will also not require payments after you pay a certain amount – that's how my mom's is anyways. I think if you have a long family history of Alzheimer's or other diseases that don't kill you, but make care essential, then long term health insurance is a must. My Mom, like her mom, grandmother, aunts, etc. will most likely get Alzheimer's, and while my brother and I love her dearly, caring for someone will Alzheimer's as it gets worse over the years can be a full time job. My Mom doesn't want that kind of care to fall on either of us time wise or financially, and instead would rather have the means to be well taken care of where we can come visit her. I do plan on getting LTC insurance at some point for the same reasons – if I have Alzheimer's one day I don't want my care to be a burden.