Is long-term care insurance a solution for older adults?

On Behalf of | Jul 14, 2023 | Estate Planning

Moving into a nursing home is a decision many people would prefer to avoid if possible. While it is a smart move to plan for aging in place early in the retirement process, those preparing for retirement also need to accept the possibility that they might require support throughout their golden years. 

In-home nursing support or a room at a nursing home will cost thousands of dollars a month and could quickly diminish the resources someone has set aside for their retirement. Long-term care insurance is one of the few forms of coverage that would apply to such support needs. Is purchasing a long-term care insurance policy the best means of covering such costs? 

Policies become prohibitively expensive over time

When someone purchases a long-term care policy, their age when applying and even their sex will have a significant impact on how much they pay for coverage. Women pay substantially more for the same coverage at the same age as a man would, and those closer to retirement age have substantially higher premiums. 

In theory, someone who buys a policy in their 50s would pay a premium for several decades before requiring benefits. Those who purchase a policy later in life and who would need benefits sooner will likely pay far more for coverage, to a point where it may not be a viable solution. 

Planning for long-term care often requires a thorough review of all the options, including private insurance policies and even certain forms of public benefits. Understanding the limitations of long-term care coverage may help people more effectively plan for their financial needs as they age.