Consult a financial planner before buying long-term care insurance

Paying for long-term care is a worry for many, particularly aging baby boomers. Certified financial planner Kevin Young, of Young Wealth Management in Davis, Calif., offers the following advice on whether it’s wise to invest in a long-term care insurance.

Health insurance and Medicare do not cover the expense of long-term care.

But if your net worth is mainly your IRA balance and your primary residence, buying long-term care/life insurance may not be the best use of limited resources. Life insurance protection should be moved to the bottom of your priority list.

A combination policy or bundled policy is a life insurance policy with a long-term care insurance rider, which can be used to pay for long-term care expenses. The selling pitch from insurance agents who sell this type of policy is that, if you don’t ever use the long-term care benefit, you will have a death benefit. The death benefit is reduced dollar for dollar when you use the long-term care portion of the life insurance policy.

Combination policies such as this are expensive and do not offer a good value because couples cannot share the pool of long-term care benefits, long-term care benefits may be limited, and benefits may not keep up with future long-term care costs.

Also, the policy may have limitations on where you can receive care and may provide only a limited menu of features to suit your budget and anticipated needs. You want a policy that is comprehensive.

Consult an objective financial planner, one who doesn’t sell insurance and who understands your entire financial plan.

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