If you’ve ever looked at long-term care insurance, you know it is both expensive and complicated. But as this article from the New York Times shows, the decision is not likely to get any easier.
Costs of premiums are up significantly over the last year, an average increase of 9%. And unfortunately, that’s the amount for newly issued policies. Insurers also raise premiums on in-force policies, but a meaningful study of how much is added to the cost is more difficult. Some people have reported premium increases approaching 50%, depending on the situation.
It’s hard to calculate whether insurance makes sense when you can’t determine what the future cost will be.
Another aspect of long-term care insurance that complicates the decision is the myriad options available. You have to make decisions about single policies, husband and wife policies, the daily benefit amount, adjustments for inflation, the length of the elimination period, and so forth. Add to that the huge variation in premium rates between insurers, and it’s no wonder people put off making a decision.
On top of it all, the State of Oklahoma allows more money to be protected from nursing home costs when people with long-term care insurance later apply for Medicaid eligibility, so to protect your financial well-being it’s important to know how Medicaid works when considering long-term care insurance.
In many cases, long-term care insurance can be a useful tool in the process of planning how to pay for care. It can provide flexibility and options, and allow you to preserve more of your assets and income. But even considering these benefits of long-term care insurance, the decision to purchase is best made as one component of a comprehensive elder care plan.