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Health insurance is designed to prevent against sky high medical debt, which can quickly be accrued if you have a health related emergency. If you need care for an extended period of time, however, such as in an assisted living facility or as home care, you need a special form of insurance called long term care insurance to be protected. This insurance is not for everyone, however. If you don’t end up needing long term care for a very long period of time, the premiums required might exceed the benefit you receive in return. Keep the following things in mind when you’re deciding whether or not long term care insurance is a good investment for you.
Long term care is most useful for older individuals who are apt to end up in long term care facilities like a nursing home. If you are young and in good health, the chances of you winding up using your long term insurance policy are probably pretty slim, you will end up paying premiums for which you get nothing in return. In short, it isn’t the best investment for a healthy twenty-something with a good medical history. While an insurance company may try to persuade you to prepare for any worst case scenario, reminding you that a person at any age can be stricken with illness, in all likelihood you won’t need long term care until you are over the age of 65.
90-Day Policy Many long term insurance policies will only kick in if your care exceeds 90 days. Since many seniors who do need assisted living care, or in home care, don’t need in for more than 90 consecutive days, even seniors who fall ill for several months don’t always get to use their long term care insurance. If you are prone to stints of illness, and are tempted to get long term care insurance, consider whether or not you’ll need it for much more than 90 days. Of course, illness is unpredictable, so you can’t calculate this exactly – but if you rarely fall ill for more than a few weeks then your long term care insurance may never pay out. On the other hand, if you suspect that you will eventually need care for the long haul, then this insurance can be a worthy investment.
If you are in a position to set aside some savings for your future care, doing so can be a smart alternative to long term care insurance. By setting aside about $3,000 a year, the approximate cost of long term care insurance premiums, you will have a nest egg prepared for any long term medical care needs. In the event that you never use long term care, you can use the savings for your other needs, unlike the premiums that you pay for insurance which will never be reimbursed if you don’t use your policy. If you won’t have savings at your disposal, investing in a long term care insurance policy is more worthy of consideration.
Author Bio: Guest post contributed by Hayley Spencer for EasyFinance.com – providers of various financial products. Visit Easy Finance to learn more about their services.