Is Long-Term Care Insurance Right for You?
How to make a smart decision for your future care needs
Making Sense of Long-Term Care Insurance
Long-term care (LTC) insurance helps cover the cost of services like home care, assisted living, or nursing home care—expenses that aren’t typically covered by Medicare. But choosing the right policy isn’t always simple. It’s important to ask the right questions and weigh your options based on your health, finances, and goals for the future.
Questions to Ask When Considering a Policy
What kind of coverage do I need most?
Some policies focus on in-home care, others on facility-based care, and some offer a combination. Think about what kind of support you’d prefer if you couldn’t care for yourself. Would you want to stay at home as long as possible? That may steer you toward a more flexible policy.
How do I want to pay for it?
You can pay monthly, annually, or even with a lump sum in some cases. Some policies offer “limited pay” options—higher premiums for a shorter period—to avoid paying in retirement.
Can I lock in my premium?
While it’s rare to have a truly “locked-in” rate, some policies are more stable than others. Ask about the company’s history of premium increases. Rising costs can make even a good policy hard to keep.
How is my health?
Your current health plays a big role. Premiums are lower—and approval more likely—if you buy when you're relatively young and healthy, typically in your 50s or early 60s.
Are there tax benefits?
Some LTC premiums are tax-deductible, and benefits paid under a qualified policy may be tax-free. It’s worth talking to a tax advisor to understand how this might apply to your situation.
Understanding the Drawbacks
The biggest concern? You might never use it. If you stay healthy and independent, your premiums may feel like wasted money. Here are a few other drawbacks to keep in mind:
High Premiums – LTC insurance isn’t cheap, especially as you age or if you have pre-existing health conditions.
Rate Increases – Even after purchase, premiums can rise, making the policy hard to afford later.
Use Uncertainty – You might pay for decades and never need care.
Policy Caps – Many plans have daily or lifetime payout limits, which may not fully cover actual care costs.
What Experts Like Dave Ramsey Say
Ramsey advises buying LTC insurance around age 60 and choosing a benefit amount that aligns with the average cost of care in your area. He cautions that while lifetime coverage is available, it can be prohibitively expensive. A benefit period of 3–5 years often provides a good balance between coverage and cost.
A Smarter Option: Asset-Based Long-Term Care
At Stahlnecker Group, we often recommend asset-based long-term care insurance as a more flexible, efficient alternative to traditional LTC policies. This type of policy combines long-term care protection with life insurance benefits, providing several key advantages:
Flexibility: Use premiums or existing assets to build cash value over time, which can help cover care or be passed on to beneficiaries.
Tax Efficiency: Access the policy’s cash value tax-free, offering a smart, tax-advantaged way to prepare for care needs.
Customization: Tailor the policy to fit your specific goals and financial situation.
Asset Protection: If long-term care isn’t needed, the policy’s value remains intact, preserving your investments.
Death Benefit: Leave a legacy—if care is never required, a death benefit goes to your beneficiaries.
Asset-based LTC policies address many of the biggest concerns people have with traditional plans, offering both peace of mind and financial security.
Let’s Start the Conversation
Long-term care planning doesn’t have to be confusing or stressful. Brooks Stahlnecker holds a certification in Long-Term Care and can help you understand your options—whether traditional or asset-based. Let’s start the conversation today and design a plan that protects your future and preserves your wealth.
Advisory services through Discipline Wealth Solutions, Inc.
The Stahlnecker Group and Discipline Wealth Solutions, Inc are separate and independent entities. The articles and opinions expressed in this newsletter were gathered from a variety of sources, but are reviewed by Discipline Wealth Solutions prior to its dissemination. All sources are believed to be reliable but do not constitute specific investment advice.
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