clock menu more-arrow no yes

Filed under:

LONG-TERM CARE COVERAGE

If you're considering purchasing long-term care insurance coverage, here are some questions you should ask yourself, according to the March issue of Kiplinger's Personal Finance Magazine.

If you answer yes to the first two questions and then to several others, you may want to seriously consider buying long-term care insurance, according to the magazine.Otherwise, some of the ideas suggested in the answers may be your best bet.

Is your net worth excluding your house between $100,000 and $1 million? If you're worth more than $1 million, you can self-insure. If you're worth less than $100,000, you may only delay assistance from Medicaid if you purchase long-term care insurance. If you're in-between, you may want to seriously consider long-term care insurance.

Can you pay the monthly premium with no more than 5% of your income? Premiums will make up a large portion of your budget in the future if they increase faster than your income. If premiums increase faster than your income, you may have to dip into your savings to make the payments and that defeats the reason you have the insurance.

Do you need to preserve assets for a spouse, child or relative who is financially dependent on you?: Income and asset protection are what long-term care insurance does best.

Does your family live to ripe old ages or have a history or Alzheimer's or Parkinson's or other conditions that increase that chance you'll need long-term care? If your family has a history of cancer, maybe you should purchase a medical supplement policy rather than one for long-term care.

What are your chances of spending time in a nursing home? According to the New England Journal of Medicine, a 65-year-old has a 40% chance of spending at least a day in a nursing home, a 20% chance of spending at least a year there, and less than a 10 percent chance of spending five or more years there.

Almost half of the nursing home residents stay there for three months or less.

Are you a woman? Women have longer life spans than men. They also tend to enter rest homes sooner and stay longer. Three out of four nursing home residents over age 85 are women.

Is your family too far-flung to provide you with at-home care indefinitely? Single people are more likely to need nursing home policies and less likely to need home health care benefits. The latter are designed to relieve the primary care given (usually a spouse), not to provide around-the-clock care at home.

Do you feel strongly about paying your own way and avoiding state aid? Differences in the quality of care Medicaid patients receive vs. what they would receive as a private patient vary from state to state. A private patient may have more facilities to choose from or may be able to purchase higher quality care.