With regard to estate planning, several previous posts here have explored some of the options that Pennsylvania residents have when it comes to including long-term care planning. One option that is becoming increasingly popular – for those who can afford it – is long-term care insurance. So, is long-term care insurance an option for your estate plan?

The cost of long-term care insurance depends on a variety of factors, such as:

Your age when purchasing the insurance – younger is less expensive

Amount of the daily benefit – $150/day is less costly than $250/day

Length of insurance coverage – 3 years would cost less than 5 years

Elimination period – when does coverage start: day 1, day 31 or day 101 – the shorter the elimination period, the more expensive the premium might be

However, the monthly cost for the insurance premium needs to be put into perspective. It can be helpful to think of long-term care insurance as an investment, rather than a cost. But, an investment in what? As a recent article pointed out, it can be an investment in protecting your retirement funds.

Few people understand just how expensive long-term care can be. For instance, the recent article noted that the average cost for one private room in a nursing home can cost almost $100,000 per year. At that rate, it is easy to see how, if no other alternatives are in play, a person’s retirement funds could be expended quite quickly.

That’s where a long-term care insurance plan can help to cover that risk. For those who believe it is a good option, long-term care insurance could potentially cover a large portion of those costs, if it is ever needed. However, each person’s financial situation is different, which is why it can be a good idea to explore all of the potential options for paying for long-term care as part of an estate plan.

Source: Kiplinger, “The Ins and Outs of Buying Long-Term Care Insurance,” Ken Moraif, March 9, 2018