Do You Know How You Will Be Financing Long Term Care?
By planning ahead, you can avoid a long term care financial crisis.
Many people choose not to think about financing long term care.
They assume that their health insurance or Medicare will cover the costs.
Unfortunately, that is not the case. Most health insurance policies do not cover long term care, or LTC.
While medicare is increasing the kinds of care it will cover, it is not as comprehensive as people assume.
Finding out about funding for long term care in advance will help you prepare and avoid a financial catastrophe.
This long term care review can provide some information to get you started.
One way to save money on LTC is to receive care from a spouse, other family member or friend.
While this can dramatically cut down on the costs, it has some downsides.
There is no guarantee that the kind of care you will need can be given by your chosen caretaker.
Also, this may have a hidden cost if the caregiver has to sacrifice hours on the job.
Some families use the equity in their home to pay for the costs of long term care.
Taking out a reverse mortgage or selling the house can free up a significant amount of money for care.
Oftentimes, however, leaving one’s home can be emotionally trying at an already difficult time.
One of the most common ways for financing long term care is Medicaid.
Medicaid will pay for a variety of long term care services.
One major catch is that the medicaid eligibility guidelines are quite strict.
You must qualify as low-income, and if you have recently “spent down” your assets in order to meet those qualifications, there may be a waiting period before you can join and receive benefits.
Getting private insurance from companies like John Hancock, MetLife and CNA, represents a small but growing source of financing for long term care.
This can reduce reliance on government programs or your own assets.
On the other hand, high premiums make it cost-prohibitive for many people.
If you can afford the premiums and wish to be able to protect your assets in the event you need care, this may be a good option for you.
One advantage to purchasing long term care insurance is that you can obtain a tax credit. Talk with your CPA about this.
Save For It
One alternative to insurance is to save money on your own for the possible costs of LTC.
This is appealing for many people because they don’t have to rely on their family’s help or government programs.
Also, unlike insurance, if they never need long-term care, they won’t have lost the money invested in premiums over the years.
Unfortunately, there is no perfect solution that works for everyone.
Look at your own situation and weigh your options carefully.
Talking about financing long term care with your family can help you reach a decision that works for you.
By planning for financing long term care ahead of time, you can reduce the stress surrounding an already difficult time.
And now your planning can be made even easier with a free long term care insurance quote.