Planning for healthcare in retirement can seem overwhelming. One area to consider is long term care insurance. According to the US Department of Health and Human Services, 70% of people turning age 65 will need long term care services at some point in their lives.
Here are the top 5 mistakes people make when considering long term care insurance for themselves:
1) Put their head in the sand. If you are reading this article, you are likely not one of these people. Far too often, people fail to plan for the future simply because it seems too far off, too confusing, or too depressing. Not everyone needs long term care insurance, but everyone needs a long term care plan. A plan should include who you want to provide care, where that care should happen and how will it be paid for.
2) Putting it off. Suze Orman, one of America’s leading financial advisors admits to making a catastrophic mistake not pushing her mother to get long term care insurance earlier. She paid about $25,000 per month for about 7.5 years. “No well-planned retirement should be without long term care insurance. It is the very cornerstone of retirement security,” says Orman. If you wait too long, you could incur financial ruin by not being covered for a long term care event.
3) Becoming insurance poor. While it’s commendable that you plan for the future, some folks try to plan for ALL possible events by purchasing policies with the maximum pay out and coverage possible. For some who can afford it, that is okay. For others, this could leave you ‘insurance poor’, meaning you spend so much money on the insurance that you run out of money, often times leading to dropped/lapsed policies when you need it most. A long term care insurance policy does you no good if it is not active at time of need.
4) If your spouse can’t have it, then you aren’t interested! It is very common to apply for LTCI together as you are eligible to receive a hefty discount on your policies. The problem that arises all too frequently is one spouse gets declined for coverage, while the other is accepted. This makes them upset, so then no one is covered. Big mistake! In all reality, if your spouse is declined coverage, you should be more inclined to keep your policy, as you will likely be the sole care giver and need help yourself. Have your policy intact will provide extra support while caring for your spouse.
If you fail to plan, you must live with whatever circumstances come your way. We recommend you speak to someone who specializes in long term care planning today. Visit our site at www.LTCconsumer.com or call us at 877.582.3675.