[…] Preparing financially for future medical care is obviously a major task, but it’s one that needs more planning that simply purchasing insurance. Yes, long term care insurance and Medigap policies will help to pay for care that isn’t covered by Medicare, but people also need to make sure that they have a financial strategy in place for paying for care that isn’t covered by insurance, and for dealing with premiums that can and do rise over time. […]
[…] One of the most important lessons from the wave of recent premium hikes on long term care policies is to keep in mind that the premiums are not fixed. Although they don’t increase as frequently as health insurance premiums, they are not locked in the way term life insurance premiums are. Unfortunately, some agents might not have communicated this clearly to their clients. Other insureds might have had several years without a rate increase and started to think that the policies simply didn’t have rate increases after all. It’s important that agents who help clients select long term care coverage are clearly communicating the fact that the premiums can – and likely will – increase as the years go by. If the insured is stretching financially to cover the initial premiums, the long term care policy might not be the best fit.
[…] The ACLU estimates that it takes $72,000/year to house an elderly inmate, and this is similar to what a year in a nursing home costs. Prisons aren’t the only places that are being impacted by the rising cost of long term care – it’s a problem facing all of us as we age, and the cost of long term care has appeared to be recession-proof, showing no signs of decreasing.
[…] But the downside is that you have to be able to accumulate a large amount of cash in order to shield yourself against financial devastation if you do end up needing significant long term care. 63% of workers over the age of 55 have less than $100,000 in retirement savings, so adding the need to save an additional large sum of money specifically designated for long term care needs might not be realistic for most people. […]