What is Long-Term Care Insurance, and Do you Need It?
Five takeaways:
- A Genworth Financial report says that 70% of people 65 or older will need some kind of long-term care in their lives
- Long term care is extremely expensive and looks only to become more expensive over time. The average cost of a private room in a nursing home in 2019 was $102,200 a year, which is 57 percent more than it cost in 2004, according to Genworth Financial.
- At this point, Medicare and Medicaid provide inadequate long-term coverage. Medicare will only pay for 100 days maximum in a nursing home, and Medicare does not cover any unskilled home health care (which includes help dressing, bathing, eating etc.)
- While long-term care might offer peace of mind (not only will keeping a policy holder from being a burden on their spouse or family later in life but protecting one’s savings by reducing potential health care costs), it can also be a waste of money if a policy-holder does not wind up requiring extensive, long term care.
- So should you buy it? Unless it is clear that you may spend extensive time in a care facility or in need of in-home assistance, the better route forward is to be aggressive in saving for retirement, with the expectation that you may incur long term health care costs in later years.
Dave Roos from How Stuff Works
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