The Insurance You Never Want to Use

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It’s safe to say, no one buys insurance because they hope they’ll use it. Insurance is often associated with something bad or negative happening. Most people think about insurance once a year during Open Enrollment at their work, or if a life event takes place which makes them think about getting covered.

There are a few exceptions to this. For example, you may pay for medical, dental, or vision insurance through payroll deduction at work. This is coverage all people can benefit from with annual preventive care visits to help you stay healthy.

The insurance coverage that is important to buy, but you hope you never need to use, includes:

  • Fire Insurance
  • Flood Insurance
  • Life Insurance
  • Accidental Death & Dismemberment Insurance
  • Short-Term Disability Insurance
  • Long-Term Disability Insurance
  • Long Term Care Insurance

Let’s focus on Long Term Care Insurance (LTCI) for a moment. This coverage pays for home care, assisted living, community care, and nursing home care services. To use this coverage and begin the elimination period (or waiting period), your doctor must confirm you are unable to do two out of six activities of daily living (ADLs), including:

  1. Eating
  2. Bathing
  3. Dressing
  4. Transferring (such as to a bed or chair)
  5. Toileting
  6. Maintaining continence

Besides the six ADLs, you may also be eligible to start the elimination period if you have a cognitive impairment such as dementia or Alzheimer’s.

It’s difficult to think about no longer being able to do these tasks on your own. For some, this could be due to an accident, illness, or aging. It’s estimated that 70% of people will need some form of long term care services at some point in their lifetime. That means in a group of three friends, two of you will need long term care in your lifetime.

While LTCI is an insurance you hope you never use, you’ll be glad you have it if (and when) you need it. The 2016 average cost of assisted living in California is $48,183 per year. These rates will only continue to increase in 20 to 30 years when you need care.

For example, let’s say you are age 60 living in CA with a life expectancy of 85 and need three years of care. You could expect to pay over $610,000 for care in an assisted living facility. Unfortunately, most people don’t have this kind of money set aside in retirement to pay for the care they need, which is why buying coverage in your retirement planning years is so important.

Are you covered? Discover the cost of Long Term Care Insurance in your state by speaking with a Long Term Care Specialist today.

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