You should generally have at least $75,000 in savings and investments (including in retirement accounts) outside of your home. If you have less than $75,000 Long-TermCare Insurance would generally be not appropriate unless you qualify for a defined pension. If you have more than $3,000,000 you should consider unlimited total asset protection policies.
The best time to plan is when you are in your 40s or 50s. However, if you are over age 70 your options may be more limited. Those over 80 have very few, if any, options available.
The underwriting criteria differ with every company. You will have to answer some health questions to even obtain an accurate quote. You ideally want to obtain coverage when you enjoy good health. If you are already receiving care in your home or if you live in a care facility you would be ineligible for coverage. Some policies offer coverage for those with some health issues. A Long-Term Care specialist can help you determine your eligibility based on your health history.
If you have children you probably don’t want to place the full responsibility and burden of caregiving on them. Being a caregiver is very difficult and can adversely impact their own families, careers and their own health. If they don’t live nearby this makes it even more difficult. If you don’t have children a Long-Term Care policy can ensure you have access to quality care either at home or in a quality facility. They can become your advocate as well.
Single or Divorced?
You should also find a policy that offers case management. Being alone doesn’t mean you are alone.
Many Long-Term Care Insurance policies offer spousal discounts and shared benefits. This provides additional savings and flexibility that should be discussed with your Long-Term Care Insurance specialist.
Currently, 45 states offer special Partnership Long-Term Care Insurance policies which provide you with additional dollar-for-dollar asset protection. In the event you were to exhaust all the benefits from your policy you would be able to shelter part of your estate based on the total amount of benefits paid by your policy and still qualify for Medicaid without being poor. While the chance of spending through all your benefits s small ... it gives you additional peace-of-mind. See if your state is eligible.
Amount of Benefits
Plans are custom designed. Generally, you have a monthly benefit. This is the total amount available to pay for care every month. You will either have an unlimited benefit or a benefit pool. This is the initial amount of benefits available in your policy. Benefits increase with inflation. You consider the current and estimated future cost of care to help design.
Your family history has little to do with your risk of needing future long-term care, however, if you have a substantial history of dementia or Alzheimer’s you might have a higher risk of a longer than average long-term care stay. Some insurance companies use a limited amount of family history in their underwriting.