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Taking a Hard Look at Long-Term Care Insurance

For many Americans, buying insurance to cover your home, car and health is standard practice. But long-term care insurance is a mystery for many, even though it offers important financial protection against some of life’s uncertainties.

The goal of long-term care (LTC) insurance is to protect the policy owner from footing the entire bill of an extended stay in a healthcare facility, such as a nursing home or rehabilitation center.

Because there’s no telling whether you will need long-term care in the future, and the costs can run very high if you do, it’s worth your while to learn about your long-term care insurance options and make an informed decision.

It’s possible that at some point later in life you may need specialized care. For example, as you get older, your physician may discharge you to a nursing home following a hospitalization for surgery or illness. Fortunately, Medicare will cover qualified stays up to 100 days. Sometimes, however, deteriorating mental or physical health caused by an accident, illness or dementia will lead to an extended stay in a nursing home or ongoing in-home nursing care. When this happens, even families that are in a good financial position may need to balance the expense of long-term care with their other priorities.

While Medicaid will cover long-term care costs after 100 days, this federal program requires individuals to first deplete their personal savings, among other qualifications. For this reason, even individuals who are financially comfortable may want to carefully consider long-term care insurance.

Here are some factors to think about as you consider long-term care insurance:

ยท Your age and health may affect your eligibility. Purchasing a policy when you’re relatively young and healthy may mean more years of payments, but it also helps you lock in a benefit that may not be available when you’re older or in the event you experience a health issue. The cost of a policy tends to increase with age, particularly after age 60 when health problems start to become more common. If you have a pre-existing condition, or a family history of one, you may not be eligible to purchase certain policies. Carefully review the fine print to see if any conditions are excluded from coverage.

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