High-Cost Long-Term Care Insurance: Alternatives

High-Cost Long-Term Care Insurance: Alternatives

Not everyone can buy long-term care insurance.

For some, the price becomes cost-prohibitive if they wait too long to make a purchase. For instance, a 65-year-old couple can purchase a policy for $4,800 per year, with base benefits of $180,000 plus 3% inflation growth. The price for that same plan more than doubles, to $8,700 a year, if that couple waits until age 75 to buy. Having certain health conditions can make them ineligible for coverage altogether.

If you find yourself priced out of the market or ineligible for health reasons, there are other options to pay for long-term care—from reverse mortgages to Medicaid. Medicare won’t pay for long-term residence at a nursing home or assisted-living facility, or for ongoing home health care. When Medicare isn’t an option, here are a few alternatives:

  • Group Long-Term Care Insurance from your employer
  • Short-Term Care Insurance, with benefits capped at one year
  • Life/Long-Term Care Insurance lets you dip into up to half of your death to pay for costs
  • Long-Term Care Annuities: for those in poor health, needing to make a hefty upfront payment
  • Life Plan Communities: an upfront payment guarantees care regardless of future ability to pay
  • Veterans’ Benefits: a service-related disability gives access to long-term care services
  • Home Equity: a reverse mortgage or sale can use one’s property to pay for long-term care
  • Pensions or Social Security: you can pay for services out of a pension or Social Security benefit

Medicaid: with all other options exhausted, the government will step in to pay for care.

It’s better to weigh your other options and plan in advance what is the best approach for your family. It’s not something anyone wants to do, but it’s better than the alternative of needing care and not having any way to pay for it. The earlier you start saving, the more secure you’ll be later on.

For more information, please read:
The High Cost of Long-Term Care Insurance (and What to Use Instead) | US News

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