Who Needs Long-Term Care Insurance and Why?

Long-Term Care Insurance Cost – The idea of spending your golden years in a nursing home is not overly appealing to anyone. Nevertheless, it’s something we all need to think about. Fact is, long-term care — whether it’s in a nursing home, assisted-living facility, or even in our own home is extraordinarily expensive, and without careful planning, you may exhaust your assets trying to pay the bills.

Long-Term Care Insurance Cost

These days, the average cost for one year’s stay in a nursing home is $75,190 ($206 per day), according to the Metlife Mature Market Institute. And in some areas, it can be much more than that. In Stamford, Conn., for example, the average cost is $125,560 ($344 per day). These figures are expected to almost triple over the next 20 years (assuming a 5% rate of inflation in long-term care insurance costs).

For some of us, the financial solution lies in long-term care insurance (LTC). Long-term-care policies charge a fixed monthly premium based (in part) on your age when you sign up. As long as you keep paying the bills, you’re covered regardless of changes in your health and advancing age.

Long-Term Care Insurance

The premiums are much lower if you buy the policy at a relatively young age (i.e., your late 50s to early 60s) since younger people are unlikely to incur long-term-care expenses anytime soon. But if you wait until an advanced age to buy a policy, you’ll pay through the nose. And if you have a serious medical condition or bad medical history, you may be unable to find coverage at any price.

The odds of spending more than three years in a nursing home vary depending on who you ask. As expected the insurance companies tend to trumpet a very high probability, while others tend to downplay your chances.

While Medicaid acts as a safety net to make sure you are not thrown out on the street if you want your environment to be something beyond the bare necessities, it is worth your while to consider LTC and whether it is a viable option given your circumstances.

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