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Money & Policy

LISTEN: What to Know About Buying Long-Term Care Insurance

Experts' advice from the new 'Friends Talk Money' podcast


Here are two eye-popping facts: Someone turning 65 will have a nearly 70% chance of needing long-term care in the future. And the annual cost of a private room in a nursing home (national median) is over $100,000 a year, according to the recent Genworth Cost of Care Survey. Yet only about 10% of Americans 65 and older have long-term care insurance.

If you’re 50+, should you consider buying a long-term care insurance policy, which can often cost between $2,000 and $5,000 a year?

The new episode of the Friends Talk Money podcast, hosted by personal finance experts Terry Savage, Pam Krueger and me, helps answer that thorny question. You can listen to it below or find it on all major streaming platforms and on Friendstalkmoney.org.

Long-Term Care Costs: The Financial-Planning Topic People Hate

Paying for long-term care is the “one financial planning topic most people would love to avoid,” says Savage, author of The Savage Truth on Money, on the podcast. But, she adds, “it pays to plan ahead.”

“Whatever you have accumulated in savings could be gone in a blink of an eye if you don’t plan for long-term care.”

That’s for sure. Medicare pays very few long-term care costs and Medicaid coverage for long-term care is only available for people with minimal incomes and assets. So that means many of us will need to finance any long-term care expenses ourselves, either from savings or a long-term care insurance policy, or both.

“Whatever you have accumulated in savings could be gone in a blink of any eye if you don’t plan for long-term care,” says Phyllis Shelton, president of LTC Consultants in Nashville, on the podcast.

One reason many older adults don’t buy long-term care insurance is because they fear the cost of premiums could skyrocket, as has often been true in the past.

Hybrid Long-Term Care Insurance Policies

That’s why some people are gravitating to so-called hybrid long-term care policies, which combine traditional coverage with life insurance coverage. With the hybrid combos, long-term care policy beneficiaries receive a death benefit.

If you’re considering buying a long-term care policy of any kind, the best time to do so is in your 50s or 60s. After that, there’s a decent chance you won’t be approved for one, especially if you have a “pre-existing condition.”

Even in your 50s or 60s, you could be denied. As I note on the podcast, I learned this personally while looking into buying a long-term care policy a few years back. At the time, I was told by a major insurer that because I had diabetes, that the company didn’t sell the coverage to people who’d had diabetes for 20 years or more.

Finding a Policy

Krueger, creator and co-host of public television’s MoneyTrack and founder of Wealthramp.com, a service which lists vetted, independent fiduciary advisers, advises on the podcast: “All insurance companies are not created equal. Look at the strength of the company because the long-term care insurance contract is only as good as the strength of the company to make good on the claim.”

Savage also urges finding a good insurance agent who specializes in long-term care policies and can help you compare them.

Adds Krueger: “Get the most unbiased help you can, from a real expert.”

RIchard Eisenberg, editor at Next Avenue wearing a suit jacket in front of a teal background.
By Richard Eisenberg
Richard Eisenberg is the Senior Web Editor of the Money & Security and Work & Purpose channels of Next Avenue and Managing Editor for the site. He is the author of How to Avoid a Mid-Life Financial Crisis and has been a personal finance editor at Money, Yahoo, Good Housekeeping, and CBS MoneyWatch. Follow him on Twitter.

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