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How to Take Advantage of Long-Term Care Insurance

How to take advantage of long term care insurance

It is important to account for elder care in your financial plan as you age. Long-term care insurance helps offset the costly expenses that could take a toll on your savings or a loved one’s finances. When planning for the future and considering long-term care insurance, take into consideration the following variables.

First, use an online calculator to determine a probable amount of funding you will need based on factors such as your health and life expectancy. It’s also important to assess family history as certain health conditions may not develop until later in life. If you have a family history of any disease, it is wise to plan for the appropriate amount of required care. Conversely, if you are in good health with a family history of longevity you should plan for plenty of years of coverage.  

Another factor to consider is where you plan to live as you age. Renting an apartment in an assisted living community, with overnight awake staff and services available 24 hours a day, is less expensive than comparable 24-hour home health care live-in services. Care costs in the United States range anywhere from $17,000 annually to nearly $100,000 a year for the highest amount of care and privacy.

You should also plan for inflation when planning for senior care. A sufficient amount at the time you purchase the policy may not be enough coverage years from now when you finally need to use it. Unlike traditional life insurance, long-term care insurance provides an inflation benefit that increases the policy payout over time.

Be prepared to ask questions so you understand the limits of the policy you choose. These critical plan limits include:

  • The maximum amount per day or per month the plan will pay
  • How long the policy will pay out
  • The policy lifetime maximum

Plans vary from state to state, so it’s imperative you know exactly what your plan will cover and when it activates. There are several activities of daily living (ADLs) defined by the federal government. Usually, once you need assistance completing at least two ADLs the policy will take effect and you can receive assistance. 

If you are considering a long-term care insurance policy, read more on Retirement Living’s Best Long Term Care Insurance guide. You will find more in-depth information as well as an analysis of top long-term care insurance companies best for customer experience, plan options and transparency of information. Get quotes from multiple companies to ensure you’re getting the perfect plan for your future needs.

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