Livens & Reed, PLLC

Long-term care insurance requires a long-term commitment

There are pros and cons about buying long-term care insurance. Because the average annual cost for nursing home care nationwide and in Texas is up to $91,250, it is at least worth it for a person approaching retirement to consider whether it is the right move. One caveat: purchasing a long-term care insurance policy requires a confirmed commitment that if one defaults on the premiums, all of the money paid to date is forfeited.

According to the Center for Retirement Research, about one-third of persons who purchase long-term care insurance after age 65 allow their policies to lapse. The study further concludes that it is the people who need the coverage the most who usually can't keep up with  their payments or forget to renew them. That group usually consists of persons with impairments and people with low-income who would be in a financial crisis if care is needed.

These problems are generally indicative of negligence by the policyholder in maintaining his or her policy. The policyholder should set it up so that the company sends a reminder to a key family member when premiums need to be paid or when they get behind. Another consideration is for people approaching retirement to consider carefully whether there are sufficient financial resources to afford the payments.

A person should keep in mind when making the decision that he or she may have to be paying for decades, and that there should be a financial cushion to pay these premiums if and when there is a need for extra help. It makes good sense for a Texas resident who is 55 or older to consult with a financial adviser and with one's estate planning attorney regarding this issue. It is also beneficial to discuss the subject with one's family members regarding the protective options that will be selected, and what resources will be available, in anticipation of the necessity for long-term care in one's later years.  

Source:, "Long-term care insurance requires long-term planning : Business", Mark Miller, Oct. 31, 2015

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