Purchasing Long Term Care InsuranceFactors to Consider When Purchasing Long Term Care Insurance

Long term care refers to the type of care for those with chronic illnesses or disabilities. Is is when you need care on a daily basis for an extended period of time. This could vary from assistance with basic daily activities to skilled nursing care. This type of care can be expensive. There are several different solutions for paying for such care. One of these solutions is long term care insurance. In this article, we will go over 7 factors to consider when purchasing long term care insurance.

Age and Health

The younger and healthier you are when you purchase your policy, the less expensive the premiums will be. The older you get, the more the cost will rise. If you are diagnosed with a serious health condition, costs will skyrocket, or you may not even be able to qualify for coverage. So the sooner you are able to purchase a policy, the better.

Family Health History

Do you have a history of Alzheimer’s, heart disease, cancer, or some other type of chronic disease or serious illness that will require long term care? If so you will most likely find it to be advantageous to purchase a policy since you will be more likely to need care. If this is the case, you will want to purchase a policy as soon as possible to keep costs low.

Premiums

You should analyze your budget to determine if you will be able to afford the premiums both now and in the future without causing a great strain on your resources. You also need to take into consideration the fact that premiums tend to increase over time. In the future, if your circumstances changes and you can no longer afford the premiums, you would lose all the money you have paid in. So, this is a very important aspect to consider.

Income

Your level of income will be a deciding factor in whether or not it is advantageous to purchase a long term care insurance policy. If you have low income and very few assets you might qualify for Medicaid. Medicaid will help pay for nursing home care. But to qualify you must exhaust all other resources and meet strict eligibility requirements

If you have a high to moderate amount of income and assets more planning will be necessary since you may not be able to qualify for assistance. This is where long term care insurance comes in, to help fill the gap and keep you from unnecessarily spending down assets. An analysis of your income will help determine the best course for you.

Support System

When you are beginning to consider purchasing long term care insurance you will want to factor in your support system. How much would your family or friends be able to help you? How much can you reasonably expect from them? Your answers to these questions will help to dictate how much coverage you will need to purchase.

Taxation

As you do your research, you may find that a long term care insurance policy is of advantage to you from the standpoint of taxation. Many policies are considered tax-qualified. What does this mean for you? If you itemize your deductions and have medical expenses that are over 7.5% of your adjusted gross income, you can deduct your long term care insurance premiums. The exact amount that you can deduct will be dependent on your age.

Financial Planning

One of the most beneficial steps you can take before purchasing a long term care insurance policy is to have a financial plan completed. A good plan will analyze your current savings and investments and how they will meet the challenge of future expenses. Some will even help you compare what would happen to your nest egg with and without long term care insurance. This will help you determine if the expense of the policy is a worthwhile investment for you.

Purchasing Your Policy

If you feel that purchasing long term care insurance is the right choice for you the next step is to meet with a qualified insurance agent. They can help you sort through all the options, riders, and companies out there. They can help you narrow your choices down to find the best policy for your situation and budget.

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