Long-term care costs are expensive. Below are ways you can pay for these costs so that you can live with comfort and dignity during your retirement.
Pay for It Yourself
You can pay for long-term costs using your life savings and retirement funds. However, long-term care costs are expensive, and there is no way to know how much care you’ll need, so planning becomes a guessing game. You can rely on family members to pay for costs, but this will place undue financial hardships and inconveniences on those you love.
Long-Term Care Insurance
Long-term care insurance covers many different kinds of services. If you are considering insurance, it’s important not to wait until you need care to buy a policy. Otherwise, policies can be extremely expensive. Remember that basic health insurance does not provide coverage for long-term care.
For most seniors, especially those with preexisting conditions, it’s extremely difficult to qualify for long-term care insurance. And even if they do, it’s very expensive with an average cost of $4,000 to $5,000 per year for someone at age 65. And unlike life insurance, there is no payout to beneficiaries. You use it or you lose it. For most families, this simply doesn’t make much financial sense.
Insurance carriers themselves are finding it hard to service their long-term care insurance products. That is why premiums are soaring while at the same time benefits are being reduced, and why some carriers like MetLife and Prudential have simply stopped offering long-term care policies.
Entitlement benefits come in the form of coverage provided by Medicaid, which has become a way for many middle and upper-middle class families to pay for long-term care. However, eligibility is difficult and often requires you to spend down your assets before qualifying. Many families sadly lose their life savings paying for care, but there are ways you can protect your assets from forced spend-down while still qualifying for these entitlement benefits.