Helping your parents plan for their future can involve different kinds of estate planning. You may want your parents to have a mechanism in place to provide for their long-term care. One option is to have your parents take out a long-term care insurance policy.
Having this kind of insurance could be a major benefit to your parents if they need to go into a form of assisted living or require the help of caretakers. Before your family commits to a policy, consider how your parents can get the most out of their long-term care insurance.
When to buy a policy
According to The Motley Fool, it is not always convenient to buy long-term care insurance. If your parents are younger than 50, paying the premiums may unnecessarily drain their assets since they are unlikely to need coverage for a while. Generally, it is better to buy coverage if you are between 50 and 60 years old. Still, you do not want your parents to wait until they are after 60, or insurance may be more expensive and less easy to come by.
The terms of different policies
Long-term insurance policies differ in their coverage, so your parents should know if a policy meets their priorities. Caps on daily services may vary between insurance providers. Insurers also have different exclusions for coverage and varying time periods to wait before the policy starts to cover care services.
Having a policy that pays back costs
If your parents never have to use their long-term care coverage, they may want the money they paid into the policy to go to you and other family members. However, long-term care policies generally act like homeowners insurance in that a person pays into the policy to cover possible events without expecting the money back.
Buying a policy that combines life insurance with long-term care policies may be an alternative. While this type of insurance comes with higher premiums, it allows your parents to pay for long-term care or provide you benefits after your parents die. Your parents may rest easier knowing their insurance policy could provide for them or for their children in the future.