What is Long-Term Care Insurance? (And What to Consider)

It’s always in the back of our minds, but something we never want to think about: What will happen when I can no longer take care of myself? How will I pay for care without putting the burden on my family? 

When you or a family member needs constant care, it’s an emotional time for everyone—even when you don’t consider the financial burden that can come along with it. There is one solution that many may rely on to prepare financially for the day that they or their family member may need extra care: long-term care insurance. 

In this article, we’ll discuss what long-term care insurance is and whether or not it’s something that you should look into to help protect your financial future. 

What is Long-Term Care Insurance? 

Families take out long-term care insurance coverage when they want to financially prepare for expenses related to assisted living and in-home care, such as: 

This type of insurance is designed to provide care for people who are 65 or older and suffer from a chronic condition or other disability that requires continuous assistance and supervision. Although Medicaid provides some of this type of assistance, long-term care insurance often provides more options and a greater level of flexibility. 

What You Should Consider About Long-Term Care Insurance

1. It Helps Avoid the Financial, Emotional, and Physical Stress of Caregiving

If you’ve ever been a caregiver to an elderly family member or know someone who has, you’ve likely seen what a toll it takes on everyone involved. Without a financial plan to ensure your family is not saddled with the responsibility of paying for care or becoming a caregiver themselves, it could be damaging to their financial, physical, and emotional well-being. 

Being a caregiver is difficult, as it affects you in every way possible. In fact, according to a 2018 report, 60% of caregivers had to cut back on luxury expenses, 46% said their long-term health and well-being were negatively affected during their time as a caregiver, and 50% reported that they had less time for their family and themselves.  

When you have long-term care insurance, you no longer have to decide between your life savings and proper care. You’ve taken the necessary steps to ensure that everyone is well taken care of. And now, your family can enjoy your time together rather than worrying about who will be a caregiver or how you will pay for the exorbitant costs associated with long-term care.

2. Long-Term Care Insurance is a Large Expense

It’s no secret that long-term care insurance is fairly expensive. And once you see the cost per month for the insurance premiums, it might deter you from considering this as part of your financial plan. Keep in mind, though, that if you can afford it, long-term care coverage could help to protect your savings or that of your family members. 

It’s not uncommon for a family member to go into a nursing home or other care facility without a financial plan in place. Unfortunately, this often results in everything they’ve worked for being spent on the extremely high rates for this type of care. This scenario is why you must weigh the cost and benefits of a long-term care plan before you completely rule it out as an option.

3. You Should Consider Buying Around 60 Years Old

Some recommend buying a long-term care plan at 50 years old because you will pay less in premiums per month; however, the likelihood of you using this coverage before 60 is slim. Especially considering that this long-term care insurance is a large expense, you don’t want to pay for an extra ten years if you don’t have to. Depending on your financial situation, we typically suggest purchasing a long-term care plan at 60 to avoid paying unnecessary premiums. 

4. Not All Policies are Created Equal

Long-term care insurance policies—like any type of insurance—are not created equal. Each one will cover different types of care and have its own considerations to take into account. Before you begin a conversation about wanting long-term care coverage, take a second to think about what you specifically want to make sure it covers. Ask yourself what your goals are with this plan to make sure that whichever policy you choose helps to meet your needs.

5. Your Financial Advisor Can Talk You Through Coverage

Your financial advisor will always be there to discuss your insurance needs, as insurance is a significant piece of your overall financial strategy. Certain types of insurance, such as long-term care, can dramatically affect whether or not you reach your financial goals, and so it’s important to explore your options with the help of a professional who has your best interests in mind. 

Do You Need Help Planning for Your Family’s Financial Future? 

Our financial advisors can help take some of the stress off of such a difficult time by reviewing your finances with you to help create an updated financial plan that aligns with your new goals. Would you like to discuss a new financial strategy? Contact Southwestern Investment Group today to schedule a consultation!

Legal Disclaimer

More Articles

  • how-to-plan-for-a-successful-retirement

    How to Plan for a Successful Retirement

    October 27, 2021

    In your day-to-day, you might be looking for ways to improve your

    Read More

  • 6 Things to Consider When Selling Your Home

    November 26, 2019

    Your home is many things: your comfort zone, where you crash after

    Read More

  • How a Trust Can Meet Your Estate Planning Goals

    December 23, 2019

    Thanks to terms like “trust fund kid,” it’s commonly mistaken that trusts

    Read More

< Back to Resources