With the ever-growing cost of living in the United States, many people are wondering whether adding to their expenses is worthwhile. Long-term health care might seem a long way away, but it has benefits that might be worth the expense—or is it?
It Takes the Majority of Retirement Funds
Long-term healthcare can drastically increase costs because, as the name suggests, it’s a lifetime investment. It includes live-in assistance, assisted care, and more.
Maybe More Than a Medical Care Plan
While having a medical plan can help lower the fees and costs involved, it can only cover a limited amount. This makes having long-term health care a possible option
Who Needs Long-Term Health Care?
The U.S. Department of Health noted that 70% of anyone aged 65 would need long-term health care. They also reported that seniors may need care for longer than five years.
Out-of-Pocket Extreme Payments
With health care on hand, many Americans still have to pay over $6,000 in out-of-pocket expenses. According to Genworth reports, a private nursing home room can cost about $9,733 per month.
Some Interests
The American Association for Long-Term Care says premiums can increase steeply, and interest rates can increase 5% or more in five years.
From the Principal Expert
The principal of Armstrong, Flemming, and Moore, Chris Rivers, said that higher annual interest can be beneficial when someone is in their 60s. He also gives the example of a 55-year-old paying $5,000 for their premium, who would, by the age of 85, have paid $150,000 in premiums. A 65-year-old taking a yearly premium at $7,000 by age 85 would have paid $140,000.
You Can Be Denied
You may also be denied the coverage you want because of health risks. Some healthcare policies are not willing to take the risk when certain health conditions are involved.
Times Have Changed
Long-term health coverage can be difficult for some, especially maintaining the premiums. Perhaps “twenty years ago, the answer would have been a resounding yes, but premiums and costs have risen significantly since then…” Rivers added.
Health Conditions That Could Hinder Coverage
According to CBS reports, an individual could be disqualified if they are too “old” at the time of applying for cover.
Pre-existing Health Concerns Make It Difficult
If an applicant already has pre-existing health conditions or terminal illness, they could forfeit the ability to qualify. Some health conditions, like Parkinson’s, Multiple Sclerosis, Dementia, and Alzheimer’s, are also high risk.
New Illness Diagnosis
Someone interested in long-term health care can also be denied if they have recently received a health diagnosis revealing an illness.
No Cover For Terminally Ill
Terminal illnesses and diagnoses can also reduce the chances of a person being covered since they are viewed as a higher-risk patient.
Do You Know the Pre-Existing Conditions?
Experts suggest being familiar with insurers’ consideration of pre-existing conditions. Mike Raines, the owner of Raines Insurance Group, said, “High blood pressure-controlled is probably not a big deal for any type of long-term care policy…” He also added that a history of pre-existing diabetes or cancer might not be approved.
People Shouldn’t Wait Too Long
Senior partner with Signature Estate and Investment Advisors, Thomas West, says “Clients often take too long to explore coverage…” he also added that “perhaps clients don’t understand the underwriting for long-term care insurance is different for life insurance.”
Comparing Insurances Matters
In an interview with CBS, independent life insurance agent Susanna Zinn in Miami Beach said, “Different insurance have varying underwriting criteria.” She also advised that applicants look for insurers specializing in high-risk clients with lenient underwriting.
Check With an Employer
Zinn also said applicants can check group long-term care insurance with their employers. “These may have less stringent underwriting or guaranteed acceptance,” she said.
There Are More Options
Tim Kulhanek, co-founder of Stonebridge Wealth Systems, said that “aside from traditional long-term care insurances, you can also consider alternatives like life insurance with access to a death benefit…”
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
