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The cost of nursing homes, assisted living and home care is quite expensive these days. In fact, data shows that the average nursing home serves seniors between $8,600 and $9,700 per month. Unless you don’t have one long-term care insurancethese expenses can quickly eat into your retirement funds and nest egg.
“Long-term care insurance helps cover the exorbitant costs of home care, assisted living or nursing home stays, which can easily reach $50,000 or more per year,” says Neil Shah, founder of care platform CareYaya. “With a good long-term care policy in place, seniors can preserve their assets and ensure they can access the care they need without going bankrupt.”
But while long-term care insurance can help defray costs of this type of care, long term care policy premiums also increase with age, so at what point is it no longer worth buying a policy? Once you hit 70however, the benefits outweigh it expenses? Let’s find out.
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Is long-term care insurance worth it for seniors in their 70s? Experts weigh in
That’s when experts say a long-term care insurance policy can work for seniors in their 70s.
When long-term care insurance can be worth it for seniors in their 70s
Long-term care insurance maybe worth it if you are still in good health as these policies require medical insurance. They may also be worth it if you want to protect your loved ones financially as they age.
“Over 50% of aging adults will likely need caregiving support,” said Larry Nissenson, chief growth officer at Assured Allies. “A long-term care insurance policy can help ease a family’s financial and emotional burden by providing a source of income to cover professional caregivers.”
If you rely solely on Medicare to cover the cost of your care, then purchasing a long-term care insurance policy can also be smart, says Esther Cromwell, founder of Avendelle Assisted Living.
“Because Medicare covers limited aspects of long-term care, this insurance is critical to ensuring a stable and worry-free future,” says Cromwell. “This protects both seniors and their families from financial burdens.”
Learn more about how the right long-term care insurance policy can benefit you today.
When long-term care insurance isn’t worth it for seniors in their 70s
Long-term care insurance premiums increase with age, so getting a policy in your 70s will likely cost you more than years earlier.
“Long-term care insurance can be quite expensive,” says Shah, “especially for those who buy it later in life.”
If you have enough cash available to cover future care costs, then long-term care insurance may not be worth the cost. According to Bill Bunting, chief operating officer of Avendelle Assisted Living, seniors at his facility use a wide variety of income sources to pay for their care — Social Security payments, retirement plans, investment and retirement accounts, savings, 401(k)s and others. . Many seniors also use the proceeds from the sale of their property or business to fund long-term care.
“The aging population has prepared for retirement,” says Bunting.
If you have loved ones who have the money to care for you or can physically care for you themselves, you may also be able to skip the long-term care policy. In fact, it may be necessary if you are already in poor health or have a life-threatening illness.
“When someone receives a serious diagnosis that may lead to the need for long-term care, it’s almost always too late to purchase insurance,” says Mark Baron, owner of Baron Long Term Care Insurance.
The bottom row
If you want to minimize these high costs, shop around and compare several long term care insurance companies before taking out your policy. There are other ways to protect against long-term health care costs that you may want to explore. For one thing, many life insurance policies offer long-term care benefits or riders. They cover your long-term care costs or, if you end up not needing long-term care, pay these benefits to your heirs after you die. Some annuities offer similar benefits.
If you’re considering one of these alternatives, you’ll want to research them before applying for a long-term care policy. According to the Long-Term Care Insurance Association of America, nearly half of all applicants ages 70 to 74 are denied long-term care insurance policies. Those denials can make it impossible to get approval for other products, such as life insurance or annuities, Baron says.
“If someone gets rejected, they may have lost a chance for other products,” Baron says. “Some plans are automatic opt-outs for at least a full year if someone is denied long-term care coverage elsewhere.”
