Long term care policies provide a way for baby boomers to build a fund that will support their future care needs. Instead of having to face the care expenses with whatever assets and savings you have amassed by then, these policies help you build the finances over time at a comfortable pace. However, many baby boomers are stepping back and wondering if these policies are worth the risk.
So much has changed over the years that baby boomers are no longer certain if their retirement plans will be enough to hold for decades. People are living longer but not necessarily healthier. Moreover, the costs of everything have increased at a pace with which incomes are struggling to keep up. This is why every investment you make must count; you must weight examine each thoroughly before signing any documents.
One such decision is long term care coverage. There is no denying that this investment is not for everybody; the wealthy have their assets and savings to pay for the care expenses they accrue while low-income individuals who fall into the asset limit can turn to Medicaid. However, this leaves a big portion of middle-income Americans unsure of how to cover their care expenses.
Some Americans have chosen to purchase long term care policies, and they were not disappointed. In fact, 90% of policyholders have shared that they were satisfied with the coverage they get from their plans. However, the reality is that these individuals are still the minority. A large number of Americans still have no sure way to pay for the long term care needs that may just be a heartbeat away.
If you are at the point where you are actively seeking comprehensive coverage, then you can also refer to this guide by ALTCP.org. This helps baby boomers plan for retirement and long term care coverage more effectively.
Understandably, finding the right long term care policy can be overwhelming, especially when the looming pressure of retirement is just around the corner. A lot goes into the planning stages, and it can be difficult to know where the starting point is.
To help eliminate the confusion, here are three strategies you can apply when purchasing long term care policies.
As mentioned above, the time frame for many baby boomers is narrowing. As you get closer to the golden years, you have to consider that your income may not be as flexible as it is now. Yes, these policies can help lessen the burden on your finances in the future, but they also cost money. If you wait longer, you risk getting higher premiums because of age or developing a health condition that could lead to disqualification.
Remember that the unwritten rule of long term care coverage is that the younger you purchase, the lower the premiums you pay. Take advantage of that while you still can because it can lighten the financial load significantly. The costs are substantially easier to manage when you have more time to make the payments.
Care costs vary in each state; some even reach thousands of dollars. As you search for your dream retirement destination, do not forget to research the available care options and their corresponding rates. You can refer to AARP’s Long Term Services and Supports State Scorecard. This can help you determine just how good the care services are in the state you are considering.
However, bear in mind that you must also speak with insurance specialists if you plan to make a big move. If you have recently purchased or in the midst of acquiring one, ask your agent if this move will affect the process. If you have not purchased one yet, then you can get in touch with an insurance professional based in the area you plan to move.
Policy riders add to the cost of your plans so be sure to include the necessities only. The most common ones are the inflation protection, cash benefit, shared care, and waiver of elimination period. These have different uses, so you have to examine how each can help your circumstances. Remember: do not include a rider just because it seems to have worked for someone else.
Finding coverage requires work, patience, and even a little help. If you are still unsure if these policies are right for you, then you should consult with long term care professional to examine your options. This way, you get the help of someone who knows the nooks and crannies of the industry.