Long Term Care Insurance Alternatives
Long term care insurance is a type of insurance that will help cover the cost of assisted living, nursing care, or home health care. But for some, the price of long term care insurance puts it out of reach. In this article, we will go over the importance of long term care planning and possible long term care insurance alternatives.
The Importance of Long Term Care Planning
According to the U.S. Department of Health and Human Services, 70% of those that are turning 65 today will need some form of long term care. Such an intensive level of care has a high price tag. One way to help foot the bill is with long term care insurance. But if the premium is too high or you have health conditions that make you ineligible LTCI may not be feasible. If this is your situation it is important that you have an alternate plan in place to help provide for your needs. This is where long term care insurance alternatives may be helpful.
Group LTCI is a type of long term care insurance that employers may offer. It works like group life insurance and helps to keep the cost down. The group underwriting process makes this form of LTCI more accessible. Unfortunately, it is not a common employee benefit.
Short Term Care Insurance
Sometimes this is also known as recovery care. It provides similar coverage as LTCI but the benefits are capped at one year. Because the benefit period is capped, STCI is less expensive than LTCI. Some who cannot qualify for LTCI may be able to qualify for STCI.
Life Insurance and Long Term Care
With some life insurance policies, you can add a long term care rider. This type of rider allows you to use up to half of your death benefit to cover your long term care expenses. You may pay for this benefit in your premium. Or the insurance company will take a fee from your death benefit if you ever utilize the rider.
Health Savings Accounts
This alternate has certain qualifications that you must meet in order to utilize it. First, you must have an eligible high deductible health plan. Second, you must set up a corresponding HAS and contribute to it. First, you must have an eligible high deductible health plan. Second, you must set up a corresponding HAS and contribute to it. If you meet both of these qualifications, you can pay your long term care insurance premium with your tax-free HSA benefits.
Annuity Long Term Care Rider
Annuity long term care riders are popular with our clients. This rider will not provide you with long term care coverage. Instead, if you need LTC the rider will increase your income to help you cover the cost of your care. In some instances, this rider will double your monthly income.
Veterans benefits are taken care of through the Department of Veterans Affairs. If you have a service-related disability you may have access to long term care through this program. Additionally, your family caregivers may be able to receive compensation for the care they provide you. However, this long term care alternative is only applicable to a small number of people.
Making Your Plan
If you are not sure if LTCI or a long term care insurance alternative is right for you, the best thing you can do is meet with a Certified Financial Planner®. They can help you to navigate your options and find which one will meet your fiscal needs.
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