If you’re in your mid-50s or mid-60s, you should be thinking about how you’re going to pay for long-term care in your senior years. One option is to purchase long-term care insurance. Long-term care insurance covers health care needs you may have later in life that will span over a longer period of time, such as Alzheimer’s disease, ongoing physical therapy, or if you ever need to move into an assisted living facility. By purchasing long-term care insurance in your 50s or 60s, you’re prepaying for that care, so your policy will partially cover those medical bills later on.

When Do I Need Long-Term Care Insurance?

If you’re going to purchase long-term care insurance, you’ll need to do so now, while you don’t need it, because you won’t qualify for it once you actually have long-term care needs. Regular health insurance doesn’t cover long-term care medical services. If you don’t have a long-term care insurance policy when the time comes that you actually need it, you’ll have to pay for those costs upfront, at market rates, which will be more expensive than if you had used insurance. Plus, most people don’t have enough money in savings to cover potentially years worth of long-term care costs at market value.

Something else to consider is that you can’t be sure how expensive long-term care costs will be years from now when you need it. They could be outrageous, but if you buy long-term care insurance in your 50s or 60s, it will help with some of the cost. You can save money by being proactive about the cost of your health insurance now and opting for long-term care insurance.

Most long-term care insurance policies will reimburse you for care given not only in a hospital or facility, but also in your home or an adult day care center.

What If I Don’t Ever Need Long-Term Care?

This is entirely possible. Statistically speaking though, approximately 70% of American adults are likely to need some kind of long-term care, for an average of  3 years (3.7 years for women and 2.2 years for men, averaging out to 3 years), according to the U.S. Department of Health & Human Services.

Regular health insurance doesn’t cover long-term care. Medicare only covers short nursing home stays or limited amounts of home health care when you require skilled nursing or rehab, so that won’t suffice for long-term care either. If you didn’t have long-term care insurance and you were faced with paying for long-term care out of pocket, you could tap into Medicaid, but only after you drain your savings, and only if you’re considered low-income. To protect your savings and save yourself a tremendous amount of stress if you encounter a long-term disability or disorder, one option is to invest in long-term care insurance in your 50s or 60s.

Long-Term Care Insurance Is Not Your Only Option

Of course, there’s an alternative. You won’t need long-term care insurance if you plan on moving into a Life Plan Community, like an Eagle community, and enter a Type A contract. You’ll pay an entrance fee when you move into the community, which will cover your medical expenses for any health services you may require as you age and your health needs change. Long-term care insurance will only cover so much. So, it could actually be less expensive for you to move into a senior living community where your healthcare is prepaid than to rely on long-term care insurance. Plus, at a senior living community, you get all of the other benefits of being a resident there, like having your home maintenance taken care of and being on a meal plan as a part of your monthly service fee. Of course, everyone’s situation is different, and there’s no way to know for sure what will happen as you age or how able you will be, and that’s the gamble you’re taking when choosing whether to opt for long-term care insurance or put those dollars toward and entrance fee at a senior living community. We recommend consulting your financial adviser and doctor to get their feedback.

The Ifs, Ands and Buts

You would need to invest no more than 5% of your income on a long-term care insurance policy, according to the National Association of Insurance Commissioners. That could add up to several hundred dollars a month, though. With long-term care insurance, you’ll have more choices as far as care facilities go than you would if you were relying on Medicare, but you won’t have the priority care you could  receive at a senior living community like Eagle. And, there may be a tax break available to you if you itemize your deductions, as long-term care costs are tax-exempt for seniors if they exceed 10% of their Adjusted Gross Income. However, you would likely get that same tax deduction if you paid the entrance fee at a senior living community, because that’s also paying for long-term care.

The Bottom Line

There are several circumstances in which long-term care insurance may not be the best option for you, but since every situation is different depending on your medical and financial situations, you need to consult your doctor, tax advisor and financial advisor to get the full scope of your unique situation before deciding which route to take.

If you do choose to buy long-term care insurance, be sure to compare various insurance companies and their policies to ensure you’re getting the best deal. You’ll want to consider things like limits on daily and lifetime benefits, elimination periods, cost-of-living adjustments to protect against inflation, and restrictions on the types of care covered.

Eagle Senior Living has full-service communities where your long-term care insurance will be applicable across the nation; find the location nearest to you.