Long Term Care Insurance: Is it Worth it?
When adding another monthly expense to your finances, you must analyze whether or not that expense is worthwhile. So, if you are considering long term care insurance, you want to know if it is worth it. The stakes are high as the cost of long term care (LTC) can eventually run into hundreds of thousands of dollars, so it is important to take the time to learn as much as possible before making your decision.
Long Term Care Insurance Versus the Cost of Long Term CareTo first understand if long term care insurance is worth its price, you must know the cost of what it is protecting you from and the likelihood of incurring that cost. Where you live and the specific caregiver or facility that offers the care will affect how much you pay for long term care. However, some average statistics will can be helpful. According to a 2010 Prudential Research Report, the average rates for the various types of LTC are:
The Chances of Using Long Term Care InsuranceWith the cost understood, the likelihood of needing long term care is your next consideration. Around 70 percent of those over the age of 65 will require some form of long term care. Over 30 percent of those over the age of 65 will require nursing home care, the most costly form of care. The average time spent receiving LTC services is just over 1 year. Five percent of those over the age of 65 will spend at least 5 years in a nursing home.
Long Term Care Insurance to Fight the Rising Cost of Long Term CareThe cost of long term care is rising. The overall cost of LTC across all forms of care has increased steadily since 2004, between 31 and 47 percent depending upon the specific type of care. Nursing home costs have increased 14 percent since 2008. Home health care costs are up 13 percent since 2008, while assisted living facilities have seen the lowest increase since 2008 at only 2 percent. Keep these increases in mind as you shop for a specific policy as they will affect the limits of the policy and the need for inflation protection.
Average Rates for Long Term Care InsuranceNow it is time to look at the cost of long term care insurance. Just as where you live impacts long term care costs, it has the same effect on long term care insurance rates. Another important factor, in fact the most important, is age. The average rates across all policies for a year are $2,207 according to 2008 statistics. The breakdown for age ranges is as follows.
Long Term Care Insurance Quotes to Compare RatesThere are numerous factors that determine how much you will pay for long term care insurance, so price quotes can help you learn how much it will cost you. Quotes for long term care insurance are free and take only a few minutes to get, so there is nothing to lose by getting a few. The quotes can help find which company can offer you the best rates to maximize savings on a long term care insurance policy best suited to your needs.
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