Why Long Term Care Insurance Is A Good Financial Investment?
by
Jenny Nielsen
Most people do not perceive the risks of not insuring themselves from uncertain sickness and disability that may afflict them at some point in their lives. Lengthy stay in nursing homes and other rehabilitative care poses dangers to a persons financial security, concretely if the costs of care become excruciatingly unaffordable.
According to the Department of Health and Human Services, people age 65 and older have 60 percent possibility of entering a nursing home. The risks fall greater on women than men. It is true then if you visit a nursing home facility you will observe that most residents are comprise of women. However, both men and women have no escape in long term care. As science and technology advances our lives, we also extend the financial burden that will be shouldered by our families.
Others believe that self-insuring is a wise move to save on long term care. In reality, self-insuring is merely a selfish act to waste your earnings and assets that should have been saved for your children and family.
There are four fatal flaws that people think about long term care:
A person wont catch any health problem until age 75 to make them eligible for long term care insurance
The cost of long term care insurance today is still the same in the next five years.
A person can save at least $2,000 a year and earn at least five percent of their annual savings
They will not live longer than expected
Those assumptions are skewed in reality. Long term care, in the first place, is always expensive and continues to be expensive in the next couple of years. This means that becoming uninsured throughout your golden years only put financial stress on your part and your family.
The national annual average cost for nursing home care is $72,000; the lowest in Louisiana with $43,000, and the highest in New York with $140,000. Over the next 25 years, this rate will increase faster than the inflation rate as the shortage in nursing home workers agitate the heightening demand for LTC services that could double in few years.
Another reason why long term care insurance is a wise financial is because of the unavailability of strong health care program that will wane the problem with LTC.
Medicare is hailed as the nations saving grace for long term care, but this is not the a wise decision to rely solely on the program. Medicare partially covers the 100 days in nursing care, provided that the person has received hospital care for certain period. In fact, Medicare only pays the 20 days, and the remaining 80 days require a so-called Medicare supplement.
Medicaid, the nations main financer of long term care, provides limited assistance because it pays massive percentage of long term care. It is not a wise move to depend on Medicaid since it gives priority to the poor and requires the applicants with greater income to spend down or transfer their assets in order to qualify for coverage. Through this, The government has been trying to cut the reserves for long term care and encourage people to handle their own care through long term care insurance partnership.
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