Long-Term Care Insurance: What Are the Pros and Cons?

Long-term care insurance is self-explanatory. It covers the costs that are associated with long-term care for seniors. Since Medicare doesn’t pay for long-term care, this could be a solution. However, like any other type of insurance, long-term care insurance has its pros and cons.

Pros:

1. Protection against high costs: Long-term care services can be very expensive, especially if you need them for an extended period of time. Long-term care insurance can help you cover these costs and protect your savings from being depleted.
2. Peace of mind: Knowing that you have long-term care insurance can give you peace of mind knowing that you will be able to afford the care you need if you ever require it.
3. Flexibility: Long-term care insurance policies are flexible. You can tailor it to meet your specific needs and budget.
4. Tax benefits: Premiums paid for qualified long-term care insurance policies are tax-deductible up to certain limits based on age.
5. Inflation protection: Many long-term care policies offer inflation protection, meaning your benefits will increase over time to keep pace with rising costs.

Cons:

1. Cost: Long-term care insurance premiums can be expensive, especially if you wait until later in life to purchase a policy.
2. Limited coverage: Most long-term care policies have limitations on what they will cover and how much they will pay out per day or per year.
3. Health requirements: To qualify for a long-term care policy, you must meet certain health requirements which may disqualify some people from being able to purchase a policy.
4. Complexity: Long-term care policies can be complex and difficult to understand which may make it challenging for some people to choose the right policy for their needs.
5. Risk of not using it: If you never end up needing long-term care services, you may end up paying premiums for years without ever using the benefits.

Elimination Period

In addition to the cons listed above, there is another one that deserves a section all to itself. Most people to file claims will be paying for the insurance for many years before they do so. The investment is finally going to start paying off, but guess what?

There is a so-called “elimination” period with these policies. If you file a legitimate claim, you have to continue paying out of your own pocket for an interim that is recorded in the policy terms. It will typically be between 30 days and 180 days depending on the policy that was chosen.

Medicaid Planning

There is another way to approach potential long-term care costs. As we have stated, Medicare doesn’t pay for in-home care or a stay in a nursing home. However, Medicaid will pay the expenses if you can gain eligibility.

Since it is a need-based program, you cannot qualify if you have more than $2,000 in your own name. However, you may be able to use a Medicaid trust to develop the right financial profile without disrupting your lifestyle in any way, and we can show you how.

Let’s Get Started!

If you would like to work with an Oklahoma City or Tulsa, OK elder law attorney to develop a plan for aging, our doors are open. You can set up a consultation at the Tulsa office by calling us at 918-615-2700. You can also reach the Oklahoma City location at 405-843-6100. There is also a contact form on this site.

After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.

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