Livens & Reed, PLLC

Some may use insurance as a key strategy for long-term care

One constant debate that occurs in Texas and elsewhere with respect to elderly planning is whether to purchase long\-term care insurance (LTCI). There are pros and cons on the issue. The answer for any particular person and family will depend on the particular circumstances regarding the need for long-term care that exists, and the resources available to resolve that need.

One thing that is not debated is that long-term care is expensive, with the bill going up each year. A private room in a private institution will cost an average of $100,000, and that price may be significantly higher several years down the road. Another fact that is fairly certain is that most people will need long-term care of one degree or another in the future.

The cost of LTCI is expensive and out of the reach of some people. If one's assets allow for the expenditure, and if other provisions for future care are not available, then the insurance should be considered. Buying such insurance between the ages of 50 and 65 will provide the greatest value and lowest premiums. Trying to get coverage after 65 could be problematic if there are serious health issues that intercede.

For most people, it is unpredictable to say for sure that they will need long-term care. Therefore, a person may escape paying for LTCI if he or she is in exceptionally good health and with family members ready to provide support if needed. With so many contingencies, it may be better for some persons with sufficient assets to purchase a policy for backup purposes.

The latter strategy will work best if one finds a LTCI policy that has flexible features. Some policies sold in Texas may act like an annuity and allow withdrawals at a certain age in lieu of payments for long-term care. It is best to shop around and make extensive comparisons prior to deciding on a policy. Also, one should determine by family meetings and discussions the availability of family members in the future; that availability could reduce significantly the expenses of other options.   

Source: The Huffington Post, "Do You Need Long-Term Care Insurance?", Carrie Schwab-Pomerantz, 7/25/2016

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