When you reach a certain age, it’s natural to start thinking about the future and how you can ensure your financial security.
One of the most important considerations is long-term care insurance. Long-term care insurance can be expensive, however, and may not be an option for those on a fixed income. Fortunately, there are alternatives that seniors should explore before making a decision.
What is Long-Term Care Insurance?
Long-term care insurance helps cover the costs associated with long-term medical care and personal assistance with everyday activities such as bathing, dressing, eating, and using the restroom.
It also covers services such as home health aides, nursing homes, assisted living facilities, adult daycare centers, and hospice care. It’s important to note that Medicare does not cover these types of services unless they are medically necessary.
Alternatives to Buying Long-Term Care Insurance
If you’re on a fixed income or don’t have the funds to purchase long-term care insurance outright, there are several alternatives worth considering:
- Save money for long-term care: This may seem like an obvious solution but it’s often overlooked. Start by setting aside a small amount each month in an interest bearing account specifically for long-term care expenses. Over time this will add up and provide some peace of mind knowing that you have money set aside if needed in the future.
- Tap into ‘living benefits’ on a life insurance policy: Many life insurance policies offer ‘living benefits’ which allow you to access part of your death benefit while you’re still alive if you become disabled or need long-term care services. This could be an option if you already have life insurance but haven’t yet explored this feature of your policy.
- Sell your life insurance policy: If you no longer need or want your life insurance policy but don’t want to surrender it back to the insurer for its cash value (which is usually much less than what was paid in premiums), consider selling it through a viatical settlement company instead. You’ll get more money for your policy this way and can use it to pay for long-term care expenses if needed in the future.
- Use an annuity with long-term care riders: Annuities are contracts between an individual and an insurer where the individual pays premiums over time in exchange for guaranteed payments from the insurer at specified intervals (usually monthly). Some annuities come with riders that will pay out additional funds if the insured needs long-term care services at some point in their lifetime – so this could be another option worth exploring if you’re looking for ways to pay for potential future expenses related to long-term care services without having to buy traditional long term care insurance outright.
- Deferred annuities: A deferred annuity is similar to a regular annuity except that payments begin at some point in the future rather than immediately after purchase – so this could be another option worth exploring if you’re looking for ways to save money now but still have access to funds when needed later on down the road (e..g., when needing help paying for potential future expenses related to long term care services).
- Health savings accounts (HSAs): HSAs are tax advantaged savings accounts specifically designed for individuals who have high deductible health plans (HDHPs). Contributions made into these accounts are tax deductible and any earnings grow tax free until withdrawn – so this could be another option worth exploring if you’re looking for ways to save money now but still have access funds when needed later on down the road (e..g., when needing help paying for potential future expenses related to long term care services).
Final Expense Insurance as Another Option Worth Considering
Final expense insurance is another type of coverage seniors should consider when exploring alternatives to traditional long-term care insurance policies as it provides coverage specifically designed with seniors in mind.
This is coverage that pays out upon death rather than requiring payment of premiums over time like traditional policies do – which makes it more affordable and accessible than other types of coverage available today.
Furthermore, final expense policies typically come with built-in living benefits which allow beneficiaries access part of their death benefit while they’re still alive should they need help paying for medical bills or other costs associated with end-of-life expenses.
Long Term Care Insurance can be expensive and may not always be feasible depending on one’s financial situation. Fortunately, there are alternatives such as saving money, tapping into ‘living benefits’ on existing life insurance policies, selling one’s life insurance policy, using an annuity with LTC riders, deferred annuities, health savings accounts, and final expense policies that seniors should explore before making any decisions.
Ultimately, finding the right solution depends on one’s individual circumstances, so it’s important to research all available options before committing.
