There’s a lot to understand about long-term care insurance, but the biggest question to answer is this: Is long-term care insurance worth it?

Before we answer that, we have to define long-term care and why insurance for long-term care could be useful. Put simply, some people have chronic, lifetime disabilities or diseases that require ongoing daily care for long periods of time—sometimes, they’ll require care for the remainder of their lifetimes.

Medicare and health plans through an employer or health care exchange typically don’t cover expenses associated with indefinite or long-term assistance. You might be covered for a short hospital or nursing home stay, but not for daily care from a professional or at a care facility.

If you are worried about requiring long-term care in the future, you can take out insurance to help cover the long-term care you think you’ll need. Note that you’re unlikely to get coverage if you have a pre-existing condition, so it’s much better to consider taking out a policy while you’re still young and healthy.

One Strategy for Long-term Care

Long-term care is a subset of your overall financial and estate-planning needs. At Morton Law, we often help our clients put assets into trusts while they take out long-term care insurance to cover them until the trust can protect them. Long-term care is mainly useful for protecting assets, but it gets expensive year after year.

What this can do is get you qualified for a nursing home if you need it, because we’re shielding your assets from consideration. Of course, this strategy is more for catastrophic care only, while long-term care gives you more options.

Unfortunately, fewer insurers even offer long-term care, so the ones that are left can raise the premiums and be more selective about which policyholders they’ll take on. That makes it more difficult for a lot of our clients to secure a long-term care policy.

Some Other Possibilities

Another trend we’re seeing is life insurance policies with a long-term care rider, where the death benefits they provide can be diverted into helping pay for long-term care if you need it. These are nice because you know someone’s going to get the benefit—either the person who needs long-term care or the family after the policyholder passes.

Annuities with long-term care riders are another new option. If you end up needing long-term care, the benefits you receive are far greater than the money you had to invest in the annuity to begin with. These are nice because you know you’ll get your money back, at least, and it’s a one-time premium with lifetime coverage, rather than an ongoing monthly expense that you might not be able to afford at some point, risking the benefits as a result.

So is long-term care worth it? The answer is, it depends on your situation. (Isn’t that always the answer?)

I won’t say that you couldn’t benefit from long-term care, but the best strategy is to talk to us at Morton Law.

~Ronald Morton