4 Alternatives to Buying Long Term Care Insurance

Self-Pay Options to Cover Long Term Care Needs

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Self-pay options for long term care. MorsaImages/DigitalVision/GettyImages

A frequent concern of upcoming retirees is how they may pay for long-term care health needs later in life. Long-term care insurance can be pricey and you may never need it. So should you buy it? The key to the decision is knowing what your other options are. Below are four ways to pay for long-term health care needs without insurance.

1. Pre-Pay For Care

One alternative to purchasing a traditional long-term care policy is to buy into a continuous care community.

With these arrangements, you usually pay a decent sized lump sum to reserve your spot and then once you move in you pay a monthly fee. Many of these communities are designed to be all inclusive – meaning for your lump sum and monthly fee you will receive whatever level of medical care is needed. The idea is that you have pre-paid and fixed your costs. 

There may be big tax breaks for buying into a retirement community that offers lifetime care benefits, but there are also risks. Some facilities have gotten into financial trouble and the promises of lifetime care have not been met. Read up on how to select a care community before you invest. And keep in mind this option can cost far more than a traditional long-term care policy.

2. Community Living (i.e. The Golden Girls)

If you ever watched the TV show The Golden Girls, you’ve got an idea of what I mean by community living. Many of us will lose family and loved ones as we age.

Your best choice is to accept this as a reality of life and continue to forge new friendships and reconnect with old friends who are in your same place in life. When you choose this option you may be amazed at some of the possibilities that become available. You can choose to live together in a place of your choice and pay for the services you need such as cleaning, cooking, and even a visiting nurse if needed.

Cost sharing can allow you to maintain control and a living environment of your choice while sharing life experiences with old friends or new ones.

3. Plan Ahead with Family

Each family is different and has its own blend of love. If your family is the kind that always takes care of its own then you should openly discuss long-term care arrangements. You must have authentic discussions on what this means and if it would work for all of you. If it would, discuss the financial arrangements.

Perhaps you can pay for an addition to a family member’s home as an area you will eventually move into. Maybe your family member can add on a guest house or attached living quarters that can be rented out until such time as you will live there. Remember that you may also need in-home medical care later in life, so you want to have funds set aside to cover this and you want to be sure your future living place is accessible.

One option; if you pay for the addition to the home, and it is rented out for years, maybe the rental income could be set aside to help offset any in-home medical care needed later. Any arrangement that works for both you and your family can be discussed.

4. Head Overseas

Medical tourism is definitely on the rise.

Many Americans head overseas for various surgical procedures - but what about life overseas as a permanent solution to your long-term care needs? This first crossed my mind when I read about 85-year-old Betty Cotton in International Living’s article The Best Places to Retire in 2014. After describing the respect for elders in the Malaysian culture - and affordability of care - the article quotes Betty, “I moved to Malaysia by myself when I was 85 years old. I live in my own home, I have my own things around me, and if I need anything, anything at all, I have great neighbors who are just a phone call away. I wouldn’t live anywhere else.”

Malaysia, of course, is not the only place where you can receive dignified affordable care. There are many assisted living options in Mexico as well as overseas retirement care in the Philippines and personalized long-term care options in Thailand.

And for those who are terminally ill, there are countries (and now some U.S. states) that allow you greater choice in how your last months of life occur. For some, this may be an important factor on where you go for long term care services.