An Interview With an Expert Long Term Care Insurance Specialist – Part One

Brian Fricke, CFP®Insurance, Long Term Care

elderly couple

Do you really need long-term care insurance?

This may be a question you find yourself asking as you approach retirement. And with so many insurance options, it’s hard to know what is best for you.

So, we talked with the Long-Term Care Insurance specialist we recommend to all of our clients. I believe his advice will help you make more informed decisions about long-term care insurance now and in the future.

Q: What are some of the statistics on long-term care insurance?

A. Well, for starters, one of every two people is going to need care in their lifetime. That’s a 50/50 chance of needing insurance. If you’re going to buy one type of insurance, long-term care insurance is the type to buy.

On the other hand, there’s a one in 1,200 chance your house is going to burn down. That means you’re paying a premium for coverage on an event that is far less likely to occur. It’s a better deal for the insurance company.

You do need auto insurance because, there’s a one in 240 chance that you’re going to get into an accident. But listen to these remarkable statistics:

There’s a one in twenty chance that you’ll spend more than three days in a hospital as you age. There’s a one out of two chance that you’ll need long-term care at some point.

Q: Are there people who don’t need long-term care insurance?

A: Yes, it isn’t for everybody.

For example, if you don’t have many assets and little to protect, the premiums may be a hardship. You could probably spend your savings if you needed care and then get help from Medicaid.

Long-term care insurance is useful for many, but not all people.

Q: How much insurance do you really need?

A: It’s hard to give one broad answer. You want to have enough, but not too much insurance. We show people the risks and then help them determine how much risk they want to take.

For example, if care is $150 a day in a nursing home, someone might want to buy a policy that pays a part of that, say $100 or $120 a day. They will take the risk of paying the rest of that bill.

Other people don’t want to take on any risk and want the insurance company to pay everything. They’re usually the people who choose low deductibles on their car, home and medical insurance.

These people should look for a policy that pays everything or even pays a little bit more than everything to make sure they’re fully covered.

Stay tuned for Part Two of our discussion on Long Term Care insurance.

For more information on what you should be considering when planning for your incredible retirement, pick up a copy of my book, Worry Free Retirement.