Obtaining long-term care insurance is an unpredictable and costly prospect.
The product is confusing and often unreliable, says a story in the New York Times.
That’s why so few people buy it. Seventy percent of people will need it, but only 20 percent have it. As a result, most people who need it pay for it out of pocket or end up impoverishing themselves so that the government will pay.
The median annual cost of a semi-private nursing home room is more than $80,000 per year. It went up four percent last year.
Insurance is cheapest when you buy it while you are younger, but you may not need it for years. As premiums increase, people let their coverage lapse. They waste their money.
And fewer and fewer companies even sell it. Only 14 are in the business of selling such policies, the story says. At one time, about 100 firms sold it. But they weren’t making money.
The typical policy costs $3,000 a year. If you older, and want maximum coverage, the price is much higher.
If you buy it, make sure you understand the policy. There are also estate planning considerations. Make sure to consult an estate planning attorney.
If you have questions on elder care or estate planning, feel free to contact us for a consultation at (626) 696-3145.
