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Long-Term-Care Insurance: 3 Mistakes When Buying (And What to Do Instead)

Long-Term-Care Insurance: 3 Mistakes When Buying (And What to Do Instead)

As we grow older, the probability that we will need in-home or facility-based long-term-care services increases greatly. Long-term-care insurance will pay some or all of the costs of this care. Given the high costs of these services, why don’t more people buy insurance that will pay for them? They often fail to act because they make mistakes like the following. You want to avoid them, don’t you? Read on!

Mistake 1 – Procrastination. Neither you nor I like to think about a time in the future when we may be unable to meet our needs independently. The very thought is at least unsettling. It might even be frightening.

You may feel fine and healthy now. You may find it hard to think about a future when you are frail.

What to do Instead – Look at the numbers: The National Center for Long Term Care Information says that more than 70% of all 65 year olds will need some kind of long term care services during their lives.

The Oregon Insurance Division has reported that in 2007 a year in a private room in a nursing home cost about $76, 000 in Portland and $71,000 in the rest of the state. The services of a Home Health Aid cost about $31 per hour in the Portland area and $46 in the rest of Oregon. Those numbers are 8 years old. They are certainly much higher now.

Do you want to bet that you will not need these services? If you lose the wager, it will cost you.

Mistake 2 – Worrying about the cost. Yes, long-term-care insurance is expensive. After thinking about your cost-of-living and setting aside an emergency fund, you may not be able to pay the premiums.

But, if you can afford the premiums and want to buy a policy, waiting is another gamble. Insurance companies look carefully at your health before issuing a long-term-care-insurance policy. If you wait too long, an unexpected health problem may prevent you from buying any policy.

What to do instead – Determine if you might be able to afford a policy and if you want to buy one. Visit an insurance advisor.

Your advisor can review your financial situation with you. He can also recommend a policy or policies that would best fit your financial circumstances and meet your specific needs/

Mistake 3 – Failing to consult an insurance advisor. You have probably read that insurance salespeople are concerned only with selling you policies in order to earn a commission. This may have made you hesitant to consult an advisor.

That may be true of some advisors. After all, bad apples exist in every occupation. It is not true of all of them.

You need an advisor to assist you in reviewing your financial situation. More important, an advisor can tell you what products are available to meet your specific needs. She can also allow you to understand why that is so.

What to do Instead – Meet with an insurance advisor after you have done your basic research on the internet. Realize that you are the person who decides how that meeting proceeds. Come with a prepared set of questions.

If the answers are not satisfactory or if some other aspect of the meeting does not meet your expectations, find a new advisor.