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Long-Term Care Insurance May Be The Perfect Investment Tool

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January 17, 2021

Long-Term Care Insurance May Be The Perfect Investment Tool

Did you know that when you invest in long-term care insurance you're actually investing in yourself and your future? Although it can be a bit difficult to imagine now, but you will most likely need some help when it comes to taking care of yourself in the future. That being stated, healthcare of that nature can be incredibly expensive. That means you need to ask yourself now how you will go about paying for it. You certainly don't want to drain your savings or investment accounts. The good news is that you can invest in long-term care insurance instead.

In essence, long-term care includes a vast amount of services that simply are not covered under your standard health insurance plan. For example, you may very well need help performing daily activities such as bathing/showering, getting dressed, going to the bathroom, and getting in and out of bed. Health insurance doesn't cover those things, but long-term care insurance does. In fact, most of the available long-term care insurance policies cover you whether you are living at home, at an assisted living facility, at a nursing home, and spend time at an adult day care center.

Although investing in long-term care insurance is an important aspect of your overall investment portfolio, a great deal of people wait until it's too late. If you have a pre-existing debilitating condition then you will not qualify. That is exactly why you shouldn't wait until your 50's or even 60's to start investing in long-term care insurance.

Long-Term Care Insurance Protects Your Savings

You may not want to face this now, but you need to since long-term care costs can significantly exhaust your retirement savings. For example, the median cost of care in a nursing home is $89,297 per year, and that is for a shared room. The price spikes even more if you want your privacy in single room. Approximately 50% of 65 year olds will end up needing some type of long-term care help. Although the vast majority will require services for less than two (2) years, nearly 15% will require services for five plus years.

If you fail to set up a long-term care insurance policy before you actually need it, you will have to pay for those expenses out of pocket. In essence, paying for long-term care out of pocket can completely deplete the investments that you have made and are making today.

5 Factors That Help Determine The Costs Of Long-Term Care Insurance

Your long-term care insurance rate and ultimately the amount of money that you will spend on the investment are determined by multiple factors. They are as follows....

  1. Your Age - As you age, you will pay more money when you initially purchase the policy. That is why it's so important to invest in long-term care insurance when you are young.
  2. Your Health - As your health deteriorates, you will pay more money when you initially purchase the policy. That is why it's so important to invest in long-term care insurance when you are young and healthy.
  3. Your Gender- Females typically pay more money than men when they initially purchase the policy because they tend to live longer and have a far better chance of making claims on their long-term care insurance.
  4. Your Marital Status- Long-term care insurance premiums are less money for married people then they are for single people.
  5. Your Amount of Coverage: Much like any other type of insurance policy, you will pay more for higher coverage amounts. For example, you may prefer to pay more for higher limits on the daily and lifetime benefits, cost-of-living adjustments that protect against inflation, and shorter elimination periods. You may also decide to pay more for fewer restrictions on the types of care that is covered.

In conclusion, any shrewd investor should seriously consider purchasing a long-term care insurance policy. There certainly is a great deal of advantages to adding this essential investment tool to your overall investment portfolio. It may very well make the difference of a comfortable retirement compared to one where you will end up struggling from a financial standpoint.

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About the author

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Mark Scribner

Managing Director, Boston

Mark F. Scribner is the Managing Director of oXYGen Financial, Boston Office. Mark grew up in Melrose, MA and now lives in Boston. He has an amazing wife Michelle, who supports all of his crazy endurance endeavors, including a solo attempt to swim the English Channel! Mark is the father of four children - Mark, Bella, Olivia and Emma. He loves being an assistant NFL photographer and cancer fundraiser, along with creating and running various companies.


The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.
Background and qualification information is available at FINRA's BrokerCheck website.

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