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Is long-term care insurance an option as you near retirement?

The care people need as they get older often becomes more expensive. Nursing homes can cost thousands of dollars a month, while skilled in-home nursing support can cost hundreds of dollars an hour. Unfortunately, those expenses usually arise at a time when the ability to earn money is much lower than it was in years before.

Individuals who need substantial care as older adults will likely have no way to earn the money necessary to cover those costs. In other words, they must have already set aside or saved adequate resources to cover the costs of nursing home care and other long-term care needs.

Even substantial assets can quickly wind up absorbed by the costs involved with nursing home care and similar support for aging adults. Whether you are planning for your own golden years or helping your parents get things sorted, you may find yourself wondering if long-term care insurance is a good option.

Long-term care insurance covers what Medicare does not

Many older adults in the United States depend on Medicare to cover their medical needs, ranging from routine physicals to more intensive medical procedures. While Medicare is an excellent social safety net for older Americans, there are some noticeable gaps in what it does and does not cover.

For example, Medicare will not cover the cost of long-term residential care or in-house skilled nursing support. If your parents could potentially need to live in a nursing home as they get older, Medicare will not cover those expenses. MediCal will, but your parents have to be able to qualify for it.

Long-term care insurance will cover those costs, which makes these policies attractive to those planning for later in life. However, the monthly premiums can be hundreds or thousands of dollars every month for adults in their 50s, 60s or 70s. In fact, these insurance policies often only benefit those who have the foresight and resources to purchase them very early in their careers.

Gifts and trusts now can protect your loved ones in the future

If you can't afford a new long-term care policy now, you will need to explore other options. Qualifying for MediCal often involves diminishing household assets. Moving those assets into a trust or gifting them to children and loved ones is a great way to ensure that someone can qualify for MediCal when they need it the most.

Still, you must begin planning before your loved ones will require the coverage. The sooner you can sit down with an estate planning and long-term care planning attorney to discuss your options, the more control you and your parents will have in the future.

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