Long Term Care Insurance: When Do You Really Need It?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Feb 20, 2013

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Buying long term care insurance is a difficult decision – especially with the recent controversy over insurers not paying out benefits because they underestimated the cost of healthcare years ago. Long term care insurance may simply offer peace of mind for some, be somewhat necessary for others and may be very important to even more. But when do you really need it?

Studies reveal low probabilities of need

According to studies, the average American may not ever need long term care. Although 10 million Americans currently need it, that’s a small percentage of the overall population. Forecasters predict that the number will only rise to approximately 12 million by the year 2020 – not a significant increase. In fact, according to the U.S. Department of Health and Human Services, only about 40 percent of those Americans over the age of 65 are likely to need to stay in a nursing home and only 10 percent of those people will need to remain in the home for over five years.

Look at your family history

Experts say that it is best to look at your family history to determine whether or not long term care insurance is for you. Families with a history of Alzheimer’s disease, strokes or other disorders that may require care usually best given outside of the home should consider purchasing long term care insurance with unlimited benefits.

If your family history does not have signs of these types of illnesses, long term care insurance – at least a policy with unlimited benefits – may not be for you. Many people have purchased the insurance and never used it. That’s why it’s best to evaluate your own situation by determining whether you can really count on family members to care for you if you need care on a long term basis and if so, for how long? If you have someone to care for you, why not pay them the money you would have paid into long term care insurance premiums?

Under 55 vs. Over 55

When you purchase long term care insurance may affect your decision process. Those under the age of 55 may not really know whether they will need it. Those over 55 may know a bit more about certain health conditions that might be problematic and may have a better point of reference for making an informed decision. Even though Medicare will kick in at age 65, it’s important to realize that Medicare generally does not pay for long term care.

Like any form of insurance, purchasing long term care insurance is a risk. There are numerous factors to consider such as age, health, geographical location and the availability (and willingness) of family assistance. The key is to make sure that you’ve thought through the process before deciding on whether or not long term care insurance is the right option for you.

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