Who Needs Long-Term Care Insurance?

Joe and Susie were a young married couple of equal age. They weren't always smart with money, but they worked hard and built up a nest egg of $300,000.

Later in life, when Joe was 67 years old, he developed Alzheimer's disease. At first, it wasn't too bad. Susie used some of their nest egg to hire a homecare specialist to help with Joe a few hours every day. But as his condition worsened, Joe had to go into a nursing home.

Sadly, after five years in the home, Joe passed away from old age. Susie, now 72, is healthy as can be for a lady her age but works full time because her husband's stay in the nursing home devoured most of their nest egg.

What you've just read is sad, but it happens to thousands of people every year. However, you can keep it from happening to you.

What is Long-Term Care?

No one likes thinking about it, but as people age or become ill, they might need help doing daily tasks like getting dressed, bathing, and more. Long-term care (LTC) provides people with those services. Unfortunately, long-term care is really expensive. Most health and disability insurance won't cover it but long-term care insurance will.

Why You Need It

According to the American Association of Home and Services for the Aging, 69% of people will need some form of LTC after age 65. I'm a huge fan of this insurance. If you become ill, it ensures that your spouse will have enough money to eat and your kids won't be burdened with huge payments. Not having LTC insurance can be a $300,000 to $400,000 mistake.

Now you may be thinking, But Dave, won't the government pay for my long-term care? They will if you qualify for Medicaid, the government program designed for people who truly don't have any money.

A lot of times people try to cheat the system and move all the assets out of their parent's name and get the government to pay for LTC. Doing that is called fraud—a federal crime and the government will prosecute you! Also keep in mind that the government is already having trouble paying for those on Medicaid. Do you really want to count on the government to pay for your LTC? I say no way!

When to Buy It

Only buy LTC insurance when you turn 60. When you turn 60, the probability of having to stay in a nursing home increases dramatically. On your 60th birthday, buy it immediately!

However, if you have parents who can't afford LTC insurance and you can afford the payments, then you can buy it for them.

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