The prospect of growing old and becoming unable to take care of yourself is scary. On top of that, the price of a year's stay in a high-quality nursing home is downright frightening, reaching as high as $150,000.
The insurance industry offers a way to potentially mitigate these costs through long-term care insurance. Should you sign up?
First of all, ask yourself who would take care of you if you needed assistance? Is your family geographically and emotionally close enough to take care of you? The majority of senior citizens who need long-term care don't need 24-hour nursing services, but rather help with shopping, cleaning, and getting around.
If you're not sure you'll have the familial support you'd need as you age, then long-term care insurance is worth considering. The United Seniors Health Cooperative, a nonprofit consumer organization devoted to the issues of the elderly, suggests that long-term care insurance is appropriate provided it costs no more than 7% of your retired income and:
- You have $75,000 or more per person in assets, excluding a home and a car.
- You have a retirement income of at least $35,000 per person per year.
- You can pay the premium without adversely affecting your lifestyle.
- You could absorb up to a 30% increase in future premiums, if necessary.
If you're fairly wealthy, you may not need this insurance. Figure out what the kind of nursing home care you'd want would cost, and see how many years you could easily pay for it. If it won't present that much of a problem, you may be better off not paying hefty premiums to cover expenses you might not incur since you have alternative means of paying for them should they materialize.
Finally, if you think long-term care insurance is for you, then start looking for policies in your late 50s or early 60s. The longer you wait, the more expensive the policy will be, and the greater the chance that you'll be turned down by insurance companies due to pre-existing health conditions.
Learn more about long-term care insurance and other kinds of insurance you might need in our Insurance Center.
