March 4, 2024
Question:
How do I know if I need a LTC policy, and when should I get one?
Answer:
Those are great questions!
How do you know if you need a LTC Policy?
Everyone's situation is different and not everyone can get a LTC policy, as there is underwriting involved.
When we are analyzing care needs, we first have to ask what type of care you desire.
Some people want to stay in their home, while others would like to move to a senior living facility that starts out with independent living and then grows to more custodial care (i.e. nursing home). The cost between these two is very different.
Then determining how to fund that care is the next question. Knowing that the typical female needs 3.7 years of care (that doesn't necessarily mean nursing home, it just means care), while the average male needs about 2.2 is a starting point, but your family history and medical issues may change those averages significantly.
The most common ways to pay for this care include:
1) Self-pay from your income and assets.
2) Transfer some of the risk and purchase insurance.
3) Ask the State to pay for your care (Medicaid).
Understand that you have the most control over your care with options 1 and 2.
Why did I share all of this in order to answer your question? Because, like anything in financial planning...it depends - unfortunately, it's not cut and dry.
When should you get one?
The "best" age tends to be between 50 - 55. This is generally when your cash flow is sufficient to cover the premiums and your body hasn't started to show signs of aging for underwriting purposes.
Do your friends ask you financial questions?
Pass those questions on to us at AskRPG@rootedpg.com and we will feature them in our future newsletters.