As you get older, you will have a lot of things to think about. From when you will retire to where you plan to live, no doubt those are consequential decisions.
Another important decision is what kind of insurance you need as you age, specifically whether or not you need the protection long-term-care insurance can provide. This unique form of insurance is designed to protect you from the costs of assisted-living and nursing homes, an expense that might otherwise devastate your family financially and drain your planned inheritance.
In some cases, long-term-care insurance can be a smart purchase. If you have a family history that makes you more likely to need this type of care, purchasing a policy while you’re still young and healthy could help you sleep more soundly at night. Even so, there are things you need to think about before you buy a policy. Here are some key things to know about this coverage.
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Premiums Will Likely Be Higher Than You Think
The price of nursing-home care and assisted living are going nowhere but up, and that is reflected in the cost of long-term-care insurance. The premiums on these policies are likely to be higher than you think, and in some cases, that could make the policy unaffordable.
There are things you can do to reduce the costs, like shopping for a policy while you are younger and looking around for the most affordable coverage. No matter what you do, however, there’s no getting around the relatively high cost of these policies.
Those Costs Might Go Higher Over Time
The initial cost of a long-term-care insurance policy is likely to be higher than you think, but that is not the end of it. As with any insurance, the premiums you are asked to pay will likely rise over time.
As insurance companies respond to market forces, they adjust their rates accordingly. Chances are that adjustment will be upward, and that could strain the affordability of the coverage. If you find yourself unable to afford the higher premiums, you could lose out on the coverage, giving your finances a double whammy in the process.
Your Current Health Matters
The healthier you are when you take out the policy, the lower your premiums should be.
