Concerned about paying for the care they might need as they age, growing numbers of people are considering long term care insurance. As with most complex topics, there are plenty of misconceptions surrounding it. Here are some of the most common questions people are asking.
Do I really need long term care insurance? I have plenty of other bills to pay.
Because of rising health care costs, longer life expectancies, and other trends, long term care insurance is worth serious consideration for most people. But it's not right for everyone. You may not want to buy a policy if the cost of premiums will affect your standard of living or if you can't realistically expect to be able to pay premiums until you need care. You may also be simply willing to bet that you won't need a significant amount of long term care.
I've heard it's expensive. How much are we talking about?
Premiums vary widely depending on policy features, benefits, age, location, health status, and other factors, but as a very rough ballpark figure, a 55-year-old single person might pay about $1,500 per year. A 65-year-old might pay about double that amount. In general, married people pay significantly less than single people, since married couples tend to provide some care for each other as they age.
Do I just have to keep paying premiums until I die?
In most cases, you pay premiums until you need long term care. With some policies, you can pay for your policy in full over a predetermined period, such as 10 or 20 years.
I think I want to buy a policy, but should I wait until I'm older? Many people don't think about long term care until their health begins to fail or they reach their sixties or seventies, but it's wise to start considering long term care insurance in your forties and fifties. The longer you wait, the higher your premiums will be. As you age, they may become prohibitive, and your age or health status may disqualify you for many policies.
Is long term care insurance tax-deductible?
People who have substantial medical expenses (more than 7.5 percent of adjusted gross income) can get a tax break for long term care insurance premiums as part of their medical expenses, up to age-based limits. Contact the IRS for more information.
Where do I shop for long term care insurance policies?
First, check with your employer to see if it offers long term care insurance?it may offer lower premiums and easier eligibility than you'll get elsewhere. An accountant or financial advisor can help you compare policies, and you can also buy insurance from an agent (who works for one company) or a broker (who represents multiple companies). A wide range of information, both biased and unbiased, is available online. Always make sure you know where the information is coming from.
What if I buy a policy and decide it's not right for me?
In most states, you can cancel your policy anytime during the first 30 days for a full refund of any premiums you've paid. Information about this and other protective measures is available from your state's insurance commission.
David Hayward writes for AGIS Networks, a pioneering online solutions portal for caregiving, eldercare, long term care and disability information with the mission to connect caregivers to information, resources, providers and programs that improve the quality of life of elders and family members. AGIS is dedicated to becoming the leading online resource to improve the quality of life for eldercare givers and recipients. Visit www.agis.com for more information.
