As people get older, they become acutely aware of their health and physical challenges. People in their 50’s and 60’s simply can’t do the same things they could in their teens and 20’s, at least not physically. Sure, they might be able to do the some of the same activities, but won’t have the same endurance or ability to recover from exhaustive activity.
This often leads people to think more closely about their future. More specifically, they consider the possibility of health issues arising and feel mortality pressing in. They want to protect their family and their future and one of those ways to do that is long-term care insurance.
Does everyone need long-term care insurance?
No. That is the honest, straightforward answer. Not everyone is ideal for a long-term care insurance policy. A person without any real savings or retirement investments will more likely use up their assets quickly in the event they have a serious health issue in the future. Then, Medicaid will likely kick in to cover these expenses.
What many people misunderstand about Medicaid, though, is that this is not automatic to cover long-term care expenses when a person is considered a senior. If they own a house, have savings, a 401(k) retirement portfolio, or other investments, those would need to be used up first paying for it out-of-pocket before Medicaid would cover.
What kind of plan do you need to consider instead?
This isn’t to say that you don’t need long-term care insurance if you have savings, but you need to have a plan developed first. In short, the average annual premium of a long-term care insurance policy is about $2,700.
If you pay into this policy for 10 years before you need it, that’s approximately $27,000 in premiums. Now, consider your anticipated savings and retirement benefits, including a pension. Based on the cost of long-term care now and 10 years from now, how much could you afford out-of-pocket for, let’s say, three years?
Currently, the average cost of in-home care (full-time) is approximately $50,000. Assisted living is approximately $80,000. Nursing home care is about $90,000. In some states, like Alaska, nursing home care averages $300,000 per year.
How much can you afford based on what you saved? If the numbers are staggering to you, if you have savings and are planning for retirement with a portfolio, CDs, stocks, bonds, a 401(k) plan, etc., then you should seriously consider long-term care insurance.
If you or a loved-one are considering Long-Term Care Insurance Premiums in Encinitas CA, please contact Steve Elliott at Capstone Insurance for an honest discussion about your future and your options. Call today (858) 350-3161.
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