Let’s face it, there’s no one out there who would readily admit to throwing money away. It’s not something any of us want to do, even though our spending habits and other fiscal decisions might make it seem as though we have no problem being separated from our money for no apparent reason. However, when it comes to insurance, including long-term care insurance, some people ask an important question.
What happens if you never require long-term care?
If you take out a long-term care insurance policy for yourself and possibly your spouse (if you’re married) and you pay into it for, let’s say, 20 years but never have any need of long-term care, what happens?
Essentially, nothing. There’s no reason to think a person who pays into an insurance policy is going to get anything back if they never have to use it, unless there’s a specific provision in place for them to earn some cash back, such as with some life insurance policies.
Does that mean long-term care insurance is not a good idea?
Let’s turn the tables for a moment and think about automobile insurance. It’s a requirement of the law that anyone with a registered vehicle on the roads in the United States must have automobile insurance. However, what if a person is a completely safe driver and never gets involved in any type of mishap or accident?
Do they get anything back by being a safe driver? They may earn a lower premium and there may be some other benefits to avoiding speeding tickets and other moving violations and accidents, but once they reach the end of their days, give up their driver’s license or have it revoked for whatever reason, or they decide to sell the car and not purchase another one, that doesn’t mean they get anything back.
Insurance is protection against the possibility something might go wrong. As people age, the risk of health issues, physical injuries, and other ailments increase. This is part of the natural process of aging, and along with that comes an increasing risk of having difficulty performing Activities of Daily Living (ADLs).
So, just because you may have a long-term care insurance policy and never actually require any type of long-term care, that doesn’t mean this type of insurance is a waste of money. Just imagine what might happen in your future, to your family, should you have to try and pay over hundred thousand dollars a year out-of-pocket yourself for long-term care.
When most people ultimately realize how much long-term care could cost, they quickly appreciate the value of long-term care insurance.