Long Term Care Insurance: The Basics

Life expectancies have increased significantly in the past 50 years, meaning that many individuals will experience age-related health issues such as broken hips, dementia, and chronic illnesses that require long-term care. However, how does one determine if long-term care insurance (LTCI) is necessary to supplement retirement savings? The National Association of Insurance Commissioners (NAIC) recommends asking specific questions before making a decision, such as whether you need to protect your assets and ensure your retirement savings remain intact. If the answer is yes, then LTCI may be a viable option. On the other hand, if Social Security is your sole income source, or if your retirement assets are negligible, you probably do not need LTCI. However, you should still discuss your options with your agent or advisor.

To make an informed decision, it is vital to understand what is typically covered by an LTCI policy and what is not, and to ask for guidance from a retirement planner or insurance agent. Doing some independent research and comparing benefits, coverage limits, covered facilities, and insurer ratings from different companies is also recommended. Additionally, it is important to be aware of how state insurance departments regulate premium increases among LTCI providers and to purchase LTCI as young as possible.

It is crucial to read your policy carefully and ensure you understand its contents entirely. Adding an inflation protection option to your policy is another consideration. The decision to purchase an LTCI policy is not one to be taken lightly, which is why working with a reputable agent or advisor is crucial. By considering the NAIC's tips, you can determine if LTCI is suitable for your retirement plan and discuss your options with an agent or advisor.

If you don't have an agent or advisor yet, you can reach out to me with any questions you may have - no strings attached!