Broker Check

Long-term Care: To Insure or Not to Insure

May 16, 2019

To insure, or not to insure?  When thinking about planning for potential Long-Term Care (LTC) expenses, many ask if they need insurance and if they do, what the most cost-effective method is. 

The first task is to determine the estimated costs of care in your area.  The costs of care can vary depending on your location, so it is important to determine the estimated costs before planning the budget.

Without some form of insurance, much of the LTC costs will be self-funded.  While your net-worth is an important gauge in determining your insurance needs, selling assets may have negative tax implications and may also affect your long-term legacy plans and other goals.  Therefore, income may be a more accurate gauge when determining your LTC insurance needs.  Will your income be enough to cover the costs?

If not, then it may be necessary to consider some form of insurance to help offset the costs.  LTC insurance comes in many different shapes and sizes including Traditional LTC Insurance or Life Insurance Policies with LTC riders.  Each type of policy is designed to satisfy specific needs, so it is important for you to determine what your needs may be.  We suggest meeting with a qualified professional to examine different types of policies to weigh the pros and cons of each.

The decision to insure versus self-insure requires an in-depth analysis of your current lifestyle, discretionary income, assets, and projected costs of care.  The financial impacts of needing care without proper planning could be catastrophic, so we encourage a periodic review of your needs and policies if you already have insurance.