As the nation hurtles deeper and deeper into economic uncertainty with ballooning debt, COVID-19 shutdowns affecting tens of millions of workers, and many other unique challenges, the idea of investment, especially in some type of insurance, may not seem practical. Yet, for people in their mid-to-late 50’s, long-term care insurance can be an important investment to make.
Is it really an investment?
According to the traditional definition of an investment, no, it’s not, but it’s about protection. Protection from what? Financial ruin far too often does happen in the wake of long-term care.
Many people just don’t realize how expensive long-term care is in the United States. In some places, like Alaska, for example, a nursing home can cost well over $300,000 for just one year.
Currently, the average cost of nursing home care is over $85,000, and climbing. Now, with inflation and many other factors, that cost will likely continue to increase.
If you or your spouse require any type of long-term care right now, could you afford it? Maybe. You might have to tap into your 401(k) or other retirement investments to cover it, but how much would that hurt? For most Americans, it would be devastating.
But won’t Medicare or Medicaid cover it?
Even if you didn’t need any type of long-term care until after you were 67 (the current retirement age), neither Medicare nor Medicaid is going to cover long-term care expenses until you utilize all of your available assets first.
That would include your home, if you own one. That’s right, you would have to tap into the equity of your house to cover your long-term care expenses before Medicare or Medicaid would begin covering it.
So, you see, making the choice to look into long-term care insurance suddenly looks more like an investment than a liability.
When should you start a policy?
The “sweet spot” for a long-term care insurance policy is in your mid 50’s. The longer you wait, the more you run the risk of being denied potential coverage. The longer you wait, the more likely the premiums of a policy will increase.
The sooner you begin a long-term care insurance policy, the more affordable it will be and the more it will help to protect you and your dependents from the potential that you might need long-term care in the future.
No one knows what tomorrow will bring. No one predicted this COVID-19 pandemic for 2020. Tomorrow is uncertain. If you want to protect yourself, your family, and your assets, consider long-term care insurance now.