Pros & Cons of Long-Term Health Care Insurance

Long-term-care insurance is largely beneficial.

It Can Save You Money

According to Steve Vernon, a columnist and actuary for CBS Moneywatch, the chief advantage of long-term-care insurance is that it can prevent you from going broke. The cost of paying for round-the-clock care can wipe out even a good-sized retirement nest egg.

It's Expensive

Because payouts for claims tend to be sizable, the premiums for long-term-care insurance are very expensive. For a person in his 50's, yearly premiums are generally between $1,000 and $3,000. If the insurance is never used, this represents a considerable loss.

Bottom Line

According to Christopher P. Covill, a partner at the Mercer consulting firm, it makes sense to purchase a long-term-care policy if you are worried about "spending down your resources." Although most policies will not fully cover long-term care, they will offset many of the costs.

References

• U.S. News & World Report: Pros and Cons of Long-Term-Care Insurance
• AARP: Health Cost Paradox
• CBS Moneywatch: Long-Term Care Insurance vs. Other Strategies
• Over 50 Website: Pros and Cons of Long Term Care Insurance