Can I afford the premium?
Can you afford $75k a year out of pocket? If you have $100k in investments/savings outside your home you can pay for LTC insurance without spending from your current income. The rule of thumb is that LTC insurance shouldn’t cost more than 7% of your income.
Will I ever need long-term care?
You will either die without needing long-term care or you will need long-term care – this cannot be answered in advance, which is why you also buy insurance on your home, car, and short-term health care.
If you had a change of health tomorrow and needed a few years of care what would the consequences be to those you care about? This is why people buy long term care insurance.
Q: Doesn’t Medicaid, the state health care program for low-income people, pay for long term care?
A: Medicaid has always been for people who are at the low end of the economic scale based income and assets. The Medicaid system is somewhat complex and if someone has questions they should contact their local office.
Q: What does long term care insurance cost?
A: Everyone has different needs so each policy will be designed just for that person, there is no “one-size-fits-all” policy. A 50-year old may spend $1500, a 60-year old $3,000 and a 70-year old $5000 – depending on their benefits; if single or married and the type of plan (reimbursement or cash).