This will certainly not work if you can go skiing or surfing in the car or on a sidewalk somewhere, but if you want to live and grow old, they be very useful. In fact, you can save your life. The first thing you think that the long-term care should not be the end of his life. The default text says, you must be able, two are running (or three, according to the company) of six activities of daily living (ADL).
The real question is not, "Should I buy Long Term Care Insurance", but how much and what type should I have. There are so many things to consider in buying Long Term Care Insurance. Never buy out of fear or on emotion. You don't want to buy an amount that is inappropriate for you, because you can actually customize your coverage. There is inflation to consider, and you can get a policy with or without inflation coverage. Obviously without inflation coverage is much cheaper. You can get coverage that pays whether you are in a facility or not, or only in a facility. That changes the cost as well. You can get a limited benefit period, or lifetime coverage. That is another price change. You can pick the amount of daily benefit you want, because you may decide to choose a lower premium today and make up the difference out of pocket when you use the care.
Let me bore you with a few numbers to explain why you must really think about having Long Term Care insurance.
Of the 9 million Americans receiving Long Term Care today, only about 450,000 are in a nursing home, and you can expect the number to rise from 9 million to 23,000,000 in the next 20 years. With the current average stay in a nursing home at 2.9 years, it adds up to an average cost of $217,500 per person or $436,000 for a married couple at today's costs, and you know what inflation is doing to health care costs so you should factor that in. (Right now the "experts" are projecting that today's $75,000 annual cost for Long Term Care in a nursing home will increase in the next twenty years to $300,000 per year.) These are the real numbers. Think about a million dollars apiece for you and your spouse in twenty years. That projection is for just under three years in a nursing home, which is the national average. What if you get unlucky and live longer? A study by Health & Human Services says that 40% of today's population that is age 65 will go into a nursing home, and that 10% will live at least five years. With that in mind, how about $3,000,000 for you and your spouse?
The average cost of in-home care is half of the cost of a nursing home, and assisted living is in between the two. You can save that way, providing you are capable of living without that type of care. Will you OUTLIVE your savings? Will you deplete your estate, or wipe it out completely? Do you qualify for a state partnership program in your state? A partnership program ignores your assets if your benefits run out, and without that you could have to sell everything you own to pay for your care.
Should you buy today or wait five years? HHS says that the cost goes up about $200 to $250 a year until you hit 70, so maybe you save a few hundred dollars by waiting, unless you need it now. Buy it at 40 for less that $900 per pear, or at 65 for $2500. Are all the numbers important? You bet they are. The majority of people I talk to about Long Term Care say it's too expensive. Take the $900 compared to $2500 for example. If you need the Long Term Care at age 80, here's what you spend: Starting at age 40, at $900 per year, you spend $36,000 for full coverage for the rest of your life adjusted for inflation, and starting at age 65 you spend $37,500 for the same coverage. However, if you don't start your stay in a nursing home until age 85, the 40 year old will have spent $40,500 and the 65 year old will have spent $50,000. In either case, you are covered for the rest of your life, no matter how long that is.
Back to the original question: Should I buy Long Term Care insurance? You buy car insurance, or homeowners insurance, so think of this - only one in 24 autos is ever in an accident and only one on 200 homes ever has a homeowners claim, but every other person alive today will need Long Term Care of some kind. Every other person alive today will need Long Term Care of some kind, and 40% of the population that is age 65 will go into a nursing home. Should You Buy Long Term Care Insurance? YES!