For most of us, we have experienced the affect that the long term care costs have on our own friends or family. If you fall under that category, you are probably trying to figure out if LTCI is something can afford since you have a pretty good idea that it is something that would benefit you. There are many factors that weigh in on this decision and we wanted to give some quick tips on what to prioritize to optimize your LTCI policy.
What type of health care setting would be most suitable for your life circumstances? Do you have family members to help with providing in-home care services or will you need to go to an assisted living facility?
Compare your options for the deductible elimination period of care for uncovered costs before your care benefits kick in. Most hybrid policies have a payback period dating back to the first day of needing care; however, you won’t receive those benefits until the 90 day elimination period is over. Will your nest egg be able to handle $12k to $15k of out of pocket expenses during the elimination period which averages 90 days?
Know the difference in the pool of money vs. the monthly benefit and the period of time you want your benefits to last. What does it look like when comparing home care costs vs. facility costs. You may be able to extend your length of care if you prioritize your policy in a smart manner.
Although we recommend 3% compound inflation protection, consider what the extra cost would be if you were to choose the 5% compound inflation protection and how much more you would receive in benefits. For some, this may be worth the additional funds for a hybrid policy with 5% inflation – especially to those under 60 years old.
Creating a cost analysis of your retirement funds with retirement expenses and what you could be saving yourself if you consider a hybrid LTCI policy. How much could long term care expenses affect your nest egg if you don’t have an LTCI policy in place?