IS LONG-TERM CARE INSURANCEÂ
RIGHT FOR YOU? DAVID S. CHANG
LONG-TERM CARE INSURANCE IS ALL ABOUT RISK MANAGEMENT.
HOW YOU ANSWER THE FOLLOWING QUESTIONS WILL DETERMINE IF YOU SHOULD CONSIDER PURCHASING IT.
QUESTION 1
IN THE EVENT OF A TRAGIC EVENT (SUCH AS BECOMING DISABLED) AND YOU REQUIRE LONG-TERM CARE SERVICES, WOULD IT OVERWHELM AND DIMINISH ALL OF YOUR RESOURCES AND ASSETS?
QUESTION 2Â
WHAT IS THE PROBABILITY THAT YOU WILL REQUIRE LONG-TERM CARE BASED ON YOUR FAMILY HISTORY
QUESTION 3
DO YOU HAVE ENOUGH INCOME AND RETIREMENT ASSETS TO FUND THE COSTS OF LONG-TERM CARE?
QUESTION 4
SHOULD THE NEED FOR LONG-TERM CARE OCCUR, WOULD YOU BE WILLING AND ABLE TO REDUCE YOUR HOLDINGS?
AN ESTIMATED TWO-THIRDS OF SENIORS WILL EVENTUALLY REQUIRE LONG-TERM CARE.
IF ANY OF YOUR ANSWERS TO THE QUESTIONS PREVIOUSLY INDICATE THAT YOU WOULD BE AT A MAJOR LOSS SHOULD YOU REQUIRE LONGTERM CARE SERVICES AND YOU CANNOT AFFORD TO COVER IT, LONG-TERM CARE INSURANCE MAY BE THE RIGHT CHOICE FOR YOU.
MORE THAN HALF OF SENIORS ONLY NEED THE CARE FOR LESS THAN 3 MONTHS AND THE AVERAGE STAY AT A LONG-TERM CARE FACILITY IS TYPICALLY BETWEEN ONE YEAR AND ONE AND A HALF YEARS.
IF YOU HAVE ADEQUATE FUNDS TO COVER LONG-TERM CARE, YOU MAY NOT NEED TO PURCHASE INSURANCE. IF YOU DO NOT HAVE THE FUNDS IN THE EVENT SOMETHING WERE TO HAPPEN TO YOU, AND PRESERVING YOUR HOLDINGS IS CRUCIAL, THEN YOU SHOULD CONSIDER PURCHASING COVERAGE.
TIPS: 1. FIND OUT WHAT THE AVERAGE ANNUAL NURSING HOME COSTS IN YOUR AREA. SUBTRACT YOUR FIXED INCOME SOURCES (SUCH AS SOCIAL SECURITY) AND INCOME DERIVED FROM YOUR ASSETS. IF OU FALL SHORT OF COVERING THE ESTIMATED COSTS, CONSIDER PURCHASING COVERAGE. 2. DO RESEARCH ON THE COMPANIES YOU ARE INTERESTED IN PURCHASING FROM. 3. THERE IS NO “RIGHT” POLICY, BUT IT IS IMPORTANT THAT YOU FIND THE APPROPRIATE INSURANCE FOR YOUR NEEDS.