If you are in your mid 50s, then it is important to begin planning for the possibility that you will need to pay for a stay in a nursing home or assisted living facility in the future. The average cost of a stay in a nursing home or assisted living facility is $6,844 per month. This high cost of long-term care can take such a large financial toll on any senior, so it is important for everyone to consider how they will fund this stay in the future, if it occurs.
Read on to learn about two options to consider when planning your long-term care funding.
1. Obtain a Permanent Life Insurance Policy
There are two types of life insurance policies -- term policies and permanent, also called whole, policies. While a term life insurance policy cannot be used to cover your stay in a long-term care facility, since it will only pay out after you pass away, you can borrow cash, make early withdrawals from, or even sell a permanent life insurance policy if you need to.
This makes permanent life insurance a great investment; the money you put into it can be used to cover long-term care costs if you do end up needing to stay in a nursing home or assisted living facility, and if not, your family can cash out the policy after your death.
2. Seek Long-Term Care Insurance
If you already have a term life insurance policy you are happy with or don't want to have to borrow from your permanent life insurance policy to ensure that your heirs receive all of the funds in it when you pass away, then you should consider long-term care insurance.
If your employer offers a group long-term care insurance policy, then it is a good idea to sign up for it. However, if they don't, then you can seek out an individual long-term care insurance plan.
When selecting the best plan for you, financial professionals advise considering a policy with a 5-year benefit period, since it will cover most health events that lead to seniors staying in long-term care facilities. You should also research the average cost of a stay in a nursing home or assisted living facility in your state before you select your daily benefit coverage.
You will have to make several more decisions when choosing the right long-term care insurance policy for you, such as the elimination period (waiting period before your benefits kick in) and whether you would like to add inflation protection to your policy or not. Speak to a financial planning professional, such as those at ARTAAD Financial, for help deciding which long-term care insurance policy is right for you.
If you are in your mid 50s, then it is important to begin planning for the chance that you may need to stay in a nursing home or assisted living facility in the future. Consider these two options to help cover the high costs of long-term care facilities and home care.Share