If you’re concerned that you may need long term care in the future, then figuring out how you’ll pay for it is likely to be a big worry. One option, especially for baby boomers who are still in good health, is to purchase long term care insurance. A long term care policy is not an inexpensive investment, but if you do your research and purchase wisely, it can offer much-needed peace of mind. If you’re thinking about buying long term care insurance, here are three things to consider:
- 1. Research, and then Research Some More. This is one area where due diligence can really pay off. You’ll want to learn all you can about the long term care options in your area, as well as the different policies available to you. The first step is having an idea of what your daily cost of care is likely to be. Next, consider the other sources of payment that will be available to you if the time comes to enter long term care. Do you have savings or retirement benefits that you’ll be able to use to supplement your insurance benefits? If so, you may be able to save on insurance premiums by choosing reduced benefits. Also, find out what age is best for purchasing a policy; generally, the younger you are when you purchase, the lower you premiums will be.
- 2. Make Sure You’ll Be Able To Maintain Your Premiums. When you’re calculating premiums, be sure to consider any drop in your income after you retire. If a reduced income will mean you’ll be unable to continue paying for long term care insurance, then you may want to consider a less expensive policy. Alternatively, you might consider a policy that structures your premium payments so that they’re larger during your working years, and then they’re reduced once you retire. This is called a short pay policy.
- 3. Don’t Do it On Your Own. Not all long term care insurance policies are created equal, and there’s a lot of information to digest. It pays to get the input of your financial advisor and your estate planning attorney before purchasing a policy. Not only do these professionals have experience in this area, they can help you explore all your options when it comes to paying for long term care, and help you find the most cost-effective methods.