Understanding Pros and Cons of Long-Term Care Insurance

Long-term care insurance is coverage designed to help pay for care if and when you need extended assistance performing everyday activities and caring for yourself. You may need such care due to a disability, a chronic illness, or the natural effects of the aging process. Long-term care policies typically cover assisted living, in-home care, or nursing home care.

As you consider the future, you will likely address matters such as life insurance or estate planning. Included in these matters, you should consider whether long-term care insurance coverage is right for you. Understanding the pros and cons of long-term care coverage can help you make an educated decision.

Common Benefits of Long-Term Care Insurance

The benefits you get from long-term care insurance will be at least partly dependent on your own health condition and financial situation, and the type and extent of coverage you buy. Some common benefits are summarized below.

1. Financial Protection

The expenses involved in receiving extended care at home, in an assisted living facility, or in a nursing home can be prohibitively high.

According to Genworth’s Cost of Care Survey, the median cost for a semi-private room in a nursing home in California is over $11,000 per month. Costs for assisted living care in CA average $6,250 per month, and full-time home health aid services can easily cost over $7,000 per month. Obviously, if at least some of these costs are covered by your insurance policy, your savings and assets can be protected from being depleted by these high costs.

2. Ensuring Access to Care

You can protect your access to care in the future with coverage you purchase earlier in life. With the right long-term care coverage, you will be able to afford a broader range of care than would otherwise be available to you without the coverage. However, it is vital to understand that simply purchasing long-term care coverage now does not guarantee you care in the future. Insurance companies are, first and foremost, for-profit businesses focused on their bottom lines. To this end, insurers regularly deny claims for both valid and improper reasons.

Purchasing long-term care coverage now does not mean that the insurance company will not improperly deny your claim when the time comes that you need care.

3. Ability to Customize Your Coverage

Various types of long-term care coverage are available, which can help you find coverage that suits your needs and your budget. However, you must take care to understand exactly what type of coverage you purchase, as well as how extensive the coverage is. Not understanding this can lead to a situation in which you believe you had bought more than enough coverage for your needs only to find out that the coverage available through your policy does not cover anywhere near all your care costs.

4. Relieves Future Burdens on Loved Ones

When people do not adequately prepare for the possibility they will need care in the future, the burden of care may fall to family members.

All too often, people who need care wind up being cared for by family members who likely had not planned on such an arrangement or may not have the capacity to provide the care needed, which can lead to incredibly stressful situations. The right long-term care coverage can alleviate much of the stress and hardship that would otherwise be placed on family members and loved ones who want to be sure you receive the care you need.

Some Potential Drawbacks of Long-Term Care Insurance

Like any insurance, long-term care insurance has its downsides, including the following:

1. Costs

Long-term care premiums can be expensive. Typically, the older you are, the higher the premiums will be, because the likelihood that you will use the coverage increases as you age. Other factors come into play as well. For example, if you have a pre-existing condition, your premiums will likely be substantially more than if you did not have the condition.

2. Policies Are Complex

Long-term care insurance policies are complex and include many exceptions and exclusions. If you are not aware of exactly the type and extent of coverage your policy provides, you may be in for a world of surprise and frustration when you make a claim for long-term care benefits.

3. You May Never Need It

Anytime you purchase an insurance plan, you may be paying for something that you do not end up needing to use. Purchasing insurance coverage is inherently a gamble. It is important to balance the cost of the plan with factors such as the likelihood you may need coverage, the peace of mind the plan provides, and the potentially catastrophic financial situation you might find yourself in without coverage.

4. Potential Need for Medical Qualification

Depending on your age and the type of plan you purchase, you may need to go through a medical qualification when you apply for the policy.

This could simply require answering some questions, though some insurance companies might also require a medical record review or a physical examination. In such a case, you may find that your options for long-term care coverage are more expensive or somewhat limited if you have pre-existing health conditions.

Work With an Attorney on your Long-Term Care Insurance Claim

If you have long-term care insurance and have had a claim denied or believe your insurance provider is not acting in good faith, you may need to take legal action to protect your rights. Seeking out high quality and experienced attorneys who specialize in handling long-term care policy insurance denials could be the most important action you take. McKennon Law Group PC has the experience and expertise to handle these types of cases. Please call us at 949-504-5381 for a consultation at no charge if you or someone you know or love needs help.