Who should buy long term care insurance?


Let's face it. No one looks forward to the day they will need to receive some assistance in day-to-day activity. But according to the numbers, some 70% of those who are 65 years old and above will need some kind of help in their daily activities. This may be provided by way of a caregiver living at home or by the senior moving into a nursing home or an assisted living facility.

It can be said, then, that those who are looking to need long term care (due to old age or to a medical condition) should be covered by long term care insurance to help cover the costs of long term care. After all, admitting one's self into a nursing home or care facility may cost a pretty penny and will considerably drain one's resources.

However, let's discuss the instances where you will or will not need to get this coverage:

  • Assets. Generally, if you have assets totaling to $2,000,000, then you may have enough assets to cover your nursing home fees. You won't need this coverage. If you have assets under $2,000,000 but above $200,000, you may need to consider buying this coverage to protect your assets from having to be liquidated. At this level, you will also not qualify for government-sponsored assistance, such as Medicaid. Thus, you need to look into providing for your own needs by getting this insurance.

    Now, if your assets are below $200,000, you may also do better to use this money to supplement your budget for day-to-day expenses. You may find that maintaining this policy is harder with your financial situation. You may be forced to cancel the policy midway.

  • Other resources. Will you have family and friends to take care of you in your old age or in your sickness? If you are living alone and don't have someone to help you, you will need to get this coverage. However, if you have a spouse and children who are willing to take on the expenses, then buying this insurance is not an urgent need. You may consider buying this, though, so as not to be a burden to your family.
  • Risk level. Weigh the risk you pose in relation to the need for long term care? Is your family tree filled with octogenarians, or even centenarians? Are there any chronic diseases in your family? If your family tends to live long, then, chances are, you will as well and this means that you will need some kind of long term care in your old age.
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