Long term care insurance is something that, still, too many people don’t think enough about, or if they do it’s too late. Long term care insurance is increasingly important in a society where the people are living longer and where more of them are doing so. Yet, it is a young type of insurance, so still many people don’t know about it, in spite of aggressive sales efforts.
So, why should you pay for this insurance that you actually cannot buy before you are 40 years old anyway?
Well, first, imagine the possibility that you will likely have to spend at least a year or perhaps more in some type of long term care facility because you cannot perform, unassisted, two or more ADLs (activities of daily living). Why should you worry now about having to pay for this potentially extremely expensive type of care?
For one thing, don’t rely on the government. Many people think they can rely on Medicare and Medicaid when they get older, but this is just one more myth. If you need long term care, Medicare will pay for it for the first 20 days. After that they’ll pay for it for another 80 days, minus $95 for each day. That’s all. And, they will only pay for what is defined as “skilled care”, which most long term care is not defined as being. Medicaid will pay for everything–except, first, you have to spend down all of the money and assets you own until you only have a total net worth of $2,000. Yes, you read that right. You might need to sell your car, your house, and just about all of you other worldly possessions to qualify.