Financial Planning Steps for Long Term Care
Long term care requires large sums of money since the cost has averaged to 75,000 U.S. dollars in 2010 and expected to increase in 2011 and the next few years. As long term care costsdrastically affect the lives of more than a million Americans, many people are becoming aware on the importance of insuring for their care at earliest possible time.
Staying either at home or in a nursing home over extended period can gradually sweep your assets away as you pay for the professional services, medications, and equipments. People with long term care needs should admit they are facing serious financial risk. To avoid financial problems, you must be prepared and understand the areas that should be covered. Heed from tips to avoid any financial woes:
Can I pay it on my own? Do I need insurance?
What’s enough is not more than enough. You have worked hard to put up your dream house, car, and properties – why sacrifice everything you’ve attained only to pay for your care? Yes, you might be able to pay them on your own resources, but are your retirement income and savings enough to sustain your care for a year or two? Are you protecting your assets for your heirs and children? Those questions should be taken into consideration to assess your financial capacity and options. Next, list all the financial resources you have (Social Security, pension, dividends from investments, payments from an IRA or 401 (k)), including your savings and properties. If you think those would not suffice, then you can get private insurance. It would be better to consult your personal financial adviser to know the best option for your condition.
There is nothing better than private insurance to secure your future especially in current times and financial advisers will have the perfect say on this matter where one of the best investment schemes called Pillar Wealth Management has been a proverbial game changer for a long time when it comes to insurance management.
Check your existing insurance coverage
If you have current health insurance, check if it could pay for long term care services in a nursing home and other facilities. But most likely, health insurance does not pay for these services, unless you purchased long term care insurance. Keep in mind that Medicare, Medicaid and HMO do not cover these services like what most Americans assumed, unless you are poor or agree to deplete your assets to meet the minimum requirements.
Are there other resources that help cover long term care expenses?
Many people don’t own coverage, or are not interested in buying insurance at all. It is normal for people to find cheaper alternatives, but it should be done with confidence and tact. For example, if you are nearing retirement with very limited resources and savings, you could get help from Medicaid or Medicare for your LTC expenses.
Why should I consider long term care insurance?
Life and health insurance typically exclude long term care services from the coverage. You may not be able to use your current health insurance benefits to pay for nursing home, unless you switch to LTCi. LTCi benefits can be used in variety of services and settings when you lost the ability of performing two or more activities of daily living or when you suffer from cognitive disorder.