Protecting Assets With Long Term Care Insurance

As a person ages they realize that their bodies are not functioning quite the same as they used to. Eventually they will start to have problems with activities of daily living, and for many people they eventually need some assistance from a nurse or a nursing facility. These care services are becoming more and more expensive, and the cost of them is rising faster than the rate of inflation. To pay for the services many people are purchasing long term care insurance well before they enter a nursing facility.

Long term care insurance is a great tool. When used properly it can help a person spend less of their personal wealth on nursing care, and by doing so they leave a greater legacy to their family and favorite charities. While the insurance is great, there are several important factors to take into consideration when a person is deciding whether or not they want to purchase it.

The first and most important is that they need to be insurable. Like all insurance, the providing company will not take on somebody that they think is too much of a risk. So if a person thinks they are able to get the insurance, they then must decide what type of coverage they want.

Most policies are priced with a monthly benefit. These benefits can range anywhere from several hundred dollars to several thousand dollars. The insured must make the decision of how much of the risk they want to take on themselves, and how much to let the insurance company take on. The less risk they assume, the more they will pay in premiums.

The next big part of the policy to decide is what they want as their waiting period. With items like car or homeowner's insurance the insured has a deductible in dollars. With this particular insurance, the insured's deductible is calculated in days. The industry average is a waiting period of 180 days, or six months, before benefits go into effect. This means the insured must need the services, and pay for them out of pocket, for six months before the insurance will take over the payments. If this is too long they can opt for a shorter waiting period, but this transfers more risk to the insurance company causing premiums to be higher.

As you can see long term care insurance has a good number of variables. The best thing to do is, if you are between the ages of 40 and 65, talk to a professional who sells these policies. They can help you decide which option will best suit your budget.

By: Jeremy C. Winters

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