Risk Management: Long Term Care- Insurance Policies
Action item: Long-Term Care Insurance covers part of your expenses and costs when you've lost 2 out of 6 activities of daily living or receive a Cognitive Impairment diagnosis (dementia, Alzheimer's, etc) and require nursing home care. It's typical to consider purchasing Long Term Care Insurance beginning around age 50. These policy premium amounts tend to increase rapidly over time compared to the previous few decades. Since the inception of the long-term care insurance industry, longevity rates and costs have risen exponentially compared to the original actuarial estimates. They have resulted in much higher premiums and shorter benefit periods. This industry reaction demonstrates the power of self-insuring for long-term care events first and foremost.