Moving into a nursing home or a similar long-term care facility can cost over $100,000 a year for older adults in need of support. Covering such expenses while already living on a fixed income can seem like an insurmountable challenge. Older adults may have few options for financing their care as they age.
Thankfully, long-term care insurance exists in no small part to help cover unexpected and excessive costs later in life. However, the annual expenses involved in maintaining such coverage often make it an unreasonable solution for someone’s care needs.
Premium costs increase with age
The later in life someone purchases a long-term care policy, the more they can expect to pay per month in coverage. As it stands, policies will often run well over $1,000 per month even for those still over a decade away from retirement. Someone’s overall health and age, along with numerous other personal characteristics, will influence how much they pay for their policy.
Not only do people have to consider the immediate costs of carrying their policy, but they will also have to set aside resources to continue paying their premiums even after they retire and then move into assisted living facilities or nursing homes in many cases.
Policies may not fully cover costs
The amount that people pay for long-term care insurance may seem excessive, especially when one considers that there are often limits on what the policy will pay. These limits do not necessarily take inflation into consideration, meaning that even those with coverage could have a big gap between their monthly costs and what their policy pays.
Instead of spending thousands of dollars annually on extra insurance, many people thinking about their medical needs later in life will find that a comprehensive approach to estate planning that focuses on their long-term care needs is a much smarter approach.
Careful planning can help people obtain specific forms of insurance when they have already retired and have limited resources and means of securing additional income. Learning more about the ways in which people address their medical needs and other cost-of-living expenses as they age can help those thinking about retirement obtain the most effective solutions for their situation.