It’s aggravating, seems unfair and often, makes us second guess our own thought process. The long term insurance quagmire: Do I risk a catastrophic health crisis with no LTC or do I take my chances and hope I never have to know? It’s a question that’s asked by millions of families and one that has no definitive answer; at least, not until hindsight anyway. In our modern society, is long-term care insurance even worth it?
Statistics say that we will have massive healthcare costs at some point, whether it’s due to an illness or an accident and even if it’s not us, odds are, a spouse will be in need of significant medical care. At some point, many will face those dreaded extensive medical bills and skyrocketing nursing costs. The short answer is yes, long term insurance is worth the investment. In order to protect what you’ve worked for, long term care insurance is your safest bet. It’s always been a sound financial decision that’s served its purpose well – even with increasing premiums and other costs.
The Dreaded Long-Term Care Insurance Premiums
In recent years, insurance premiums have been on the rise, so much so that it’s no longer even an option for some families. As estate planning lawyers, our goal is always to ensure our clients’ best interests are being met.
There are options and better choices; it’s just a matter of due diligence. And don’t assume Medicare will cover all of your medical costs. It won’t. Medicare will only provide limited benefits for skilled nursing care and there are time limits that play into what a recipient receives. Many believe Medicare and even Medicaid covers those costs in their entirety and for as long as they’re needed and it’s simply not true.
More than half of us will need long term care after our 60th birthdays. Reports show that 60 percent of us will put our policies to use within the first decade. Even those who have long term insurance, but opt for a move affordable plan that doesn’t kick into until 90 days after the claim’s been filed, nearly 40 percent of them use their policies.
Massive Money Traded
The numbers are even more eye-opening. In 2012, insurance companies paid out almost $7.5 billion in claims for long-term care benefits, which is a 13 percent rise from the previous year. That total was paid out to 273,000 policyholders across the nation.
Because there are more baby boomers nearing retirement age (and will continue to do so over the next several years), the number of policy claims will almost certainly keep climbing. Another similar study reveals the payouts are expected to double by 2023 and reach $34 billion by 2033.
Avoiding Nursing Homes
And by the way, if nothing else caught your attention, you should know that the most common use of long term care benefits has to do with consumers wishing to remain in their homes versus going into a nursing home. This accounts for $4.5 billion in payouts every year. Another 18.5 percent went toward expenses related to assisted-living communities, which offer a lifestyle that allows senior citizens to maintain their independence to the greatest extent possible while still making higher-level skilled services available when needed. To learn more about long term insurance, contact our offices today.
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