3 Reasons to Buy Long Term Care Insurance

Long term care insurance gives you choices.

Senior woman using long-term care benefits.
••• Long term care insurance can be very helpful if and when you need it. AE Pictures Inc.

Why buy long-term care insurance? Below are three good reasons.

1. You want the ability to access quality care quickly.

If you need assistance and don’t have long-term care insurance, what do you do? You get help from family and friends, pay for it out of pocket, and/or go on Medicaid.

To access long-term care benefits you must require help performing two out of the six activities of daily living. These are activities such as bathing, and dressing.

As you age and start needing assistance with these items, many people rely on a spouse or other loved ones first. If you don't have insurance then when family and friends can no longer provide the level of care you need, you begin to spend down your assets to pay for care. If you need care for a long time and spend all your assets then at that point government assistance programs pick up the cost of your care in a qualified nursing facility.

You are likely to access care faster when you have long-term care insurance because you know you'll have the funds to pay for it. This is one of the reasons people buy this type of insurance - so they have the ability to access care faster, and can use the insurance company’s money to pay for it.

2. You may have a long costly claim.

Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance told me the story of one of the longest claims on record: a woman who paid $12,000 in premiums over only a few years, and got $1.2 million in long-term care benefits over the next fifteen years.

As Jesse said, “Is she lucky? No. I don’t think anyone would call her lucky.” She had purchased long-term care insurance so her costs were covered, but I am sure she and her family both wish a long-term care need had never arisen in the first place. If you buy long-term care insurance, let's hope you never need it.

If you do, though, you'll be glad you have it.

3. You want freedom of choice.

When you buy long-term care insurance you will have the necessary resources to afford quality care, and you will have the ability to choose how and where you receive this care. Those without substantial resources of their own, or those who did not buy long-term care insurance, simply won't have as many choices. Does that mean everyone should run out and buy long-term care insurance? No, like any financial decision, you have to educate yourself, evaluate the pros and cons, and make a decision that is right for you. 

There are alternatives to traditional long-term care insurance, such as getting care overseas, or buying into a Continuing Care Community. Despite the alternatives, those in retirement will find there is a great deal of peace-of-mind that comes from having traditional long-term care insurance.