With the passage of the Health Insurance
Portability and Accountability Act, more individuals are becoming aware of the
need for long-term care insurance. Whether you should buy a long-term care
insurance policy will depend on your age, health status, overall retirement
goals, income, and assets. For instance, if your only source of income is a
Social Security benefit or Supplemental Security Income (SSI), you probably
shouldn't buy long-term care insurance.
On the other hand, if you have a large amount of
assets but don't want to use them to pay for long-term care, you have a large
amount of assets but don't want to use them to pay for long-term care, you may
want to buy a long-term care insurance policy. Many people buy a policy because
they want to stay independent of government aid or the help of family. They
don't want to burden anyone with having to care for them. However, you should
not buy a policy if you can't afford the premium or aren't sure you can pay the
premium for the rest of your life.
If you already have health problems that are likely
to mean you will need long-term care (for example, Alzheimer's disease or
Parkinson's disease), you probably won't be able to buy a policy. Insurance
companies have medical underwriting standards to keep the cost of long-term care
insurance affordable. Without such standards, most people would not buy coverage
until they needed long-term care services.
Some states have a regulation requiring the
insurance company and the agent to go through a worksheet with you to decide if
long-term care insurance is right for you. The worksheet describes the premium
for the policy you're thinking about buying and asks you questions about the
source and amount of your income and the amount of your savings and investments.
You don't have to fill out this worksheet, but it might help you decide if
long-term care insurance is right for you.
Not everyone should buy a long-term care insurance
policy. For some, a policy is affordable and worth the cost. For others, the
cost is too great, or the policy they can afford doesn't offer enough benefits
to make it worthwhile. You should not buy long-term care insurance if the only
way you can afford to pay for it is by not paying other important bills. Look
closely at your needs and resources, and discuss it with a family member to
decide if long-term care insurance is right for you.
Insurance companies must be licensed in your state
to sell long-term care insurance. If you decide to buy a policy, be sure the
company and the agent, if one is involved, is licensed in your state. If you're
not sure, contact your state insurance department.