Long term care insurance is a lot more perplexing to people than other types of coverage like health or life insurance. We know we’re all going to die someday, and we know that we might die while we still have people relying on us for financial support. Thus, life insurance is a pretty popular purchase, and it helps that straight term policies for healthy people are very inexpensive. Health insurance, while not inexpensive, is widely understood to be vitally important, and we’re constantly reminded of this fact as we see friends and family members of all ages and lifestyles needing health care from time to time.
But long term care insurance is a bit more complicated. It’s not as expensive as health insurance, but it’s more expensive than term life insurance. And it involves some very long range planning. For a lot of people, simply planning for retirement is a stretch. And your need for extensive long term care, if it arises, may not come about until well after you retire. So it’s understandable that many people are either on the fence about purchasing long term care insurance, or not even thinking about it at all.
In the first part of what is shaping up to be an excellent series of articles about long term care, Steve Vernon writes that “everybody needs to have a strategy to address the threat of long term care expenses.” That doesn’t necessarily mean that everyone needs long term care insurance, but we all need some sort of plan. Will you be able to self insure whatever long term care expenses you might face? Perhaps, if you have enough liquid assets. Will you have family members who can help you with the activities of daily living (dressing, bathing, feeding, etc.) if you need assistance? Maybe, but this is only a good strategy if everyone involved is on board and truly capable of helping out without it being a hardship. Will Medicare cover you? No, not for custodial care expenses. Will Medicaid cover you? Possibly, if you have very little in assets and need to enter a nursing home. But nursing homes that accept Medicaid are not particularly easy to find, and Medicaid does not cover in-home long term care. Most people would rather remain in their homes and have someone come to help them rather than moving into a nursing home, but this isn’t an option if you’re relying on Medicaid. Long term care insurance is just one of the ways you can protect your assets if you eventually need help with the activities of daily living, and protect your desire to not go to a nursing home.