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Insurance
No easy answer to long-term care query
Source: Bankrate
Q. Dear Dr. Don,
We are hearing a lot of talk these days about long-term care insurance. My husband's company has just offered to enroll its employees and their families in an LTC policy. We are both 46 and are trying to decide if we should sign up for this benefit. Or, should we just put the money into retirement investments?
-- Jeannette Juncture
A. Dear Jeannette,
There's a lot of uncertainty surrounding the decision to purchase long-term care, or LTC, insurance. The worry is whether the insurance provider will be there and approve your claim when you need it. The decision as to when to purchase the coverage can also be a dilemma.
Conventional wisdom has it that the rich and the poor aren't good candidates for LTC insurance. The rich can afford to self-insure against this need and the poor can expect some form of government aid. It's the folks in the middle who need to consider purchasing LTC insurance.
According to the National Clearinghouse for Long-Term Care Information, "... at least 60 percent of people over age 65 will require some long-term care services at some point in their lives."
I have friends who bought and needed this coverage while still in their 50s. Their experience isn't uncommon. About 40 percent of the people receiving LTC benefits are younger than 65. The top five causes of claims for people under age 65 are: cancer, stroke, neurological disease, dementia and multiple sclerosis.
The Bankrate feature "Is long-term care insurance right for you?" can help you sort through these issues. That article identifies ages 55 to 65 as the sweet spot for buying coverage. Family health history and longevity are other considerations.
I'd expect that you'll eventually want to purchase this coverage. However, I can't tell you for sure whether it's a priority at this time in your life versus retirement savings.
You should certainly review the LTC policy offered through your husband's firm. Before signing up for an LTC policy, consider consulting with a financial planner to review the policy and your circumstances. The Bankrate feature, "Financial planners: not just for millionaires anymore," can help you choose a planner.