American Families Must Balance the Pros and Cons of Long-Term Care Insurance Says Elder Attorney Andrew Hook

Hook Law Center (formerly Oast & Hook)

Virginia Beach, VA (Law Firm Newswire) April 30, 2015 – Although long-term care insurance is beneficial for some people, purchasing such a policy also has notable downsides, including the high cost of premiums and the limitations on coverage.

“People are living longer than ever and using long-term care for longer periods of time than in the past. So long-term care insurance has become very expensive, and the benefits are often inadequate,” said Andrew H. Hook, a Virginia elder law attorney with Hook Law Center, a firm located in Virginia Beach and northern Suffolk.

Nursing home care can be prohibitively expensive, even for people who are well-prepared for retirement. An annual stay in an Alzheimer’s unit can cost upwards of $100,000, which can disrupt even the most carefully planned retirements.

Long-term care insurance is expensive, too – especially for people who buy it later in life. Purchasing a long-term care plan at the age of 60 carries an average annual premium of $1,936. But a 75-year-old will face a $7,291 premium for the same coverage. No matter when a policy is purchased, its coverage is not usually robust. Most long-term care insurance will not pay for the first 60 days of care and will only pay a maximum of $150 per day. However, the majority will cover up to three years of care.

A long-term care plan can pay off for people who stay in long-term care for a full three years, which would equal $164,250 in benefits for the plan described above. However, the majority of seniors stay in a nursing home for less than 90 days, meaning that they see no benefits at all. Only a small portion of those admitted to a nursing home will stay for three years.

There are a variety of alternatives that make it possible to pay for long-term care comfortably – including spending down to qualify for Medicaid, drawing from one’s personal savings or investments, and cashing in on life insurance.