Planning for retirement most often consists of building up a 401(k), determining social security benefits, and investing in a term or whole life insurance policy. The most recent retirement strategy also includes investing in long-term care insurance in the event that a retiree will require daily care in the future.
The risk of developing health conditions, such as Alzheimer’s and cardiovascular disease, increases with age, raising the risk that an elderly individual may require care in a health or nursing home facility. Long-term care insurance helps cover the costs of health aides, a stay in a nursing home and other assistance with daily tasks, without jeopardizing personal assets.
“Consumers who would like to protect their assets, minimize dependence on family members and control how they receive nursing or home care, should carefully consider long-term care insurance,” said Sandy Praeger, National Association of Insurance Commissioners president-elect and Kansas’s insurance commissioner.
Medicare cannot be relied on since it does not pay for custodial care and private health insurance may not cover what you need. According to the Insurance Information Institute, if over 65 and have little money, you may qualify for Medicaid, but if you expect to be in the middle financially, long term health may be the best solution.
Twenty four hour home health costs can run from 8,000 and higher per month and nursing home costs can be over 100,000 a year. And purchasing the policy at a younger age when in better health; your premiums will be lower. Once the premium is set, it stays the same for the life of the policy.
However, there can be many variables to long-term health which can be confusing so if planning to purchase a policy, make sure you discuss the details and benefits with an insurance specialist so that you know exactly what type of care is covered.
The risk of developing health conditions later in life points out the importance of retirement planning. Aside from building a 401(k) or Roth IRA, it is important to purchase a life insurance policy so that your survivors will have sufficient funds to support themselves, in the event of a death.