How to Determine if You Need Long-Term Care Insurance

To help cover long-term care costs, many individuals purchase private long-term care insurance. But how do you decide if it meets your needs?

Many of us will require long-term care, such as living in a nursing home or receiving in-home services, and the cost of such services can be overwhelming. According to Statista, nursing home care cost an average of $51,600 per year in 2020, including room and board, drugs and medical supplies. In-home health care can be even more expensive, costing an average of $53,768 per year.

Medicare generally covers only about three months of nursing home care immediately following a hospitalization. Medicaid will cover some long-term care costs, but only after you have exhausted virtually all your personal resources. As a result, many nursing home bills are paid out of pocket by individuals and their families.

Is long-term care insurance right for you? It depends on your income and savings. If you can afford to set aside enough money for about four years of care while still leaving enough to support a spouse or other dependent, you probably don’t need long-term care insurance. Conversely, if your income is $30,000 or less and your savings are not extensive, you are likely to qualify for Medicaid soon after entering a nursing home, so purchasing long-term insurance wouldn’t make sense.

Most people fall somewhere between these two extremes. If that’s the case with you, we can help you decide if you need long-term care insurance, so please call or email us. We’re here for you.