Why Buy Long-Term Care Insurance?

Healthcare costs for the U.S. aging population only continue to increase over time. As medical expenses keep increasing, so does the importance of having the right coverage to protect you financially after retirement. You may have heard of long-term care insurance before and possibly even wondered, "Why buy long-term care insurance?" This coverage can help you pay for the cost of long-term care that's not covered by health insurance or Medicare.

A local independent insurance agent can help you find the right long-term care insurance. They'll help you review your long-term care coverage options to find the best policy. But first, use our guide to learn more about why you might want to buy long-term care insurance. 

Table of Contents

Q. What Is Long-Term Care Insurance?
Q. Why Should I Buy Long-Term Care Insurance?
Q. What Does Long-Term Care Insurance Cover?
Q. How Much Does Long-Term Care Insurance Cost?
Q. Who Should Consider Buying Long-Term Care Insurance?
Q. What Are the Benefits of Long-Term Care Insurance?
Q. What Happens if I Don't Have Long-Term Care Insurance?
Q. What Are My Options for Long-Term Care Coverage?
Q. How Do I Choose the Right Long-Term Care Insurance Policy?
Q. Is Long-Term Care Insurance Worth It?
Q. How Can an Independent Insurance Agent Help?

What Is Long-Term Care Insurance?

Long-term care (LTC) insurance is designed to cover many different long-term care services that assist aging and ill people with their daily activities, such as eating, bathing, and dressing. Long-term care can also include supervision for chronic disabilities and illnesses. You can use long-term care insurance to pay for services provided at your home, nursing homes, or adult day care facilities. 

Why Should I Buy Long-Term Care Insurance?

The reasons to purchase long-term care insurance are vast, but the simplest and most important is that it can help pay for your long-term care. Even though you may have retirement savings, you don't want to go through all of that hard work in a matter of months. A lot of retirement savings can be depleted in the first two years of long-term care, leaving you with nothing left for future treatment and other life expenses. 

Other benefits of long-term care insurance can include reducing the burden on family caregivers, both financially and physically. An important part of long-term care planning is considering the rising cost of elder care and assisted living. Nursing home costs continue to increase over time, along with the costs of other medical treatments. Having long-term care insurance can greatly reduce expenses for you and your family caregivers. 

What Does Long-Term Care Insurance Cover?

Long-term care insurance provides coverage for expenses such as nursing home care, in-home care, hospice care, respite care, Alzheimer's care, and adult daycare. This insurance is designed to cover treatments and services not covered by health insurance or Medicare. 

How Much Does Long-Term Care Insurance Cost?

The cost of long-term care insurance averages between $70 and $533 per month. However, long-term care insurance costs can vary quite a bit. Your policy's premium rates can depend on a number of factors, such as your age, health, and plan benefit selections. An independent insurance agent can help you get long-term care insurance quotes from providers in your area.

Who Should Consider Buying Long-Term Care Insurance?

Adults in their 50s and 60s are in the ideal age range to buy long-term care insurance. It's typically recommended to buy coverage in your 50s, especially while you're still healthy, to lock in lower premium rates, which only increase as you age. 

When asking who needs long-term care insurance, it's helpful to consider your family's health history. If your family has a history of genetic health issues, you might want to get this coverage sooner rather than later. You'll also want to consider your personal health history, assets, and savings. Determine if you'd have enough money set aside to cover the cost of long-term care after retirement without coverage.

What Are the Benefits of Long-Term Care Insurance?

Long-term care insurance offers many benefits, including financial protection against high healthcare costs as you age. Having this coverage can offer you the freedom to choose where you'd most like to receive care if you're better able to afford it. Further, having this coverage can help reduce the burden on your family members who would otherwise have to care for you or provide financial assistance. 

What Happens if I Don't Have Long-Term Care Insurance?

Without long-term care insurance, you might have to cover your own out-of-pocket costs for nursing homes, health aides, and other long-term care treatment facilities and services. This could have a serious impact on your retirement savings once you're no longer working. Medicare and Medicaid have strict coverage limits and often don't cover many long-term care services or facilities. 

What Are My Options for Long-Term Care Coverage?

There are a few different long-term care insurance options, including group and employer plans. The availability of this type of policy depends on your employer and what coverage they offer. You can also choose between traditional long-term care insurance policies and hybrid long-term care insurance and life insurance policies, which are sometimes referred to as life and LTC insurance policies. Many life insurance policies offer optional long-term care coverage riders, which can be added to your plan to help cover LTC expenses. 

Some alternatives to long-term care insurance include annuities and health savings accounts. These alternatives can also help you cover the costs of LTC. Speak with an independent insurance agent about all of your long-term care planning options to determine which is right for you.

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How Do I Choose the Right Long-Term Care Insurance Policy?

Choosing the right long-term care insurance policy involves comparing your coverage and benefit options from multiple insurers. An independent insurance agent can assist you with this process by shopping and comparing long-term care insurance policies and quotes from several carriers for you. 

Your agent can also help you add inflation riders to your policy to protect your premium rates and explain your coverage's benefit triggers and when you can start receiving reimbursement. Your agent will help you find the best long-term care insurance policy for your needs.

Is Long-Term Care Insurance Worth It?

The answer to this depends on your unique goals and current circumstances, in terms of both health and finances. If you're in good health, long-term care insurance may not make sense for you. Further, if you have plenty of savings already set aside and don't anticipate that long-term care would create financial strain, you also might not need this coverage. You'll want to weigh the cost of a policy's premiums vs. the potential costs of LTC. 

However, long-term care insurance can be well worth it for many individuals as they age. Especially if you anticipate needing LTC services for health issues after retirement, having long-term care insurance can be essential. An independent insurance agent can further advise you on whether this coverage makes sense for you.

How Can an Independent Insurance Agent Help?

Independent insurance agents have access to multiple long-term care insurance companies, so they're free to shop and compare policy options and quotes for you to find the best deal. They'll make sure you walk away with a policy that includes all the coverage you need from a reputable carrier. And down the road, your agent can help you file LTC insurance claims and update your coverage when necessary.