Pros and Cons of Long Term Care Insurance


In recent years long term care (LTC) insurance has gained in popularity, mainly because it is so new and takes time for people to comprehend.  Created in the 1980s as a way to prepare oneself for retirement, long term care insurance policies are now held by nearly eight million group or individual plans.  This shows how few people have it and how it is gaining in popularity.  There are both pros and cons to having this type of insurance plan which will be discussed below.  Remember that this is not for everyone, but for those it applies to will greatly benefit.


Long TC insurance can be very beneficial to those who become disabled while under coverage and require either arrangements to live in an assisted living facility, a nursing home, or in their own home.  They also are very flexible, allowing you to choose when and for how long the plan lasts for and the payout rates. 


There are many pay reductions to those who are in good health, young, pay your premium in one lump sum, having your family covered under one plan, etc.  In turn, this means savings in your pocket.  The payments are made on a daily or monthly basis depending on the plan and type of coverage you initially purchased.  This means that the larger the benefit you receive and the more the policy pay out; the greater the out of pocket costs will be for the long term care insurance policy.


The major drawback to Long TC is the expenses that you have to pay.  These can vary by plan, but usually run fairly high.  The reasoning is that the coverage you are receiving is expensive to maintain.  You are being assisted upon 24 hours a day.  This does not come by cheap.  When you add up the costs; approximately $80,000 a year would be spent by you, but if you have a LTC Insurance plan then you only pay $2,000 - $3,000 a year in premiums.  This does not seem like that bad of a deal anymore.


In essence, long term care insurance is a good option for many Americans, but not all.  One of the main objectives of long term care insurance is it is designed to protect assets, so if there are not assets to protect then you shouldn't’t purchase long term care insurance. You must weigh out the pros and cons before jumping into this decision, but more often than not it is a wise choice to get covered.  Be aware that in order to be eligible for your claim your doctor must certify that you that you are not able to perform two or more activities of daily living functions for a period of three months or more.  These include, but are not limited to: bathing, eating, dressing, continence, transferring and toileting or suffer from a cognitive impairment such as Dementia.


Summary: Learn the benefits of having long term care insurance versus the cons of having this type of insurance plan.  The LTC insurance plans work great for most people, but may not apply to all.