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What’s the maximum you should spend on long-term care insurance? What experts say
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As a senior, planning for the extra help you might need for your daily care can feel overwhelming. But figuring out what your future long-term care needs might be, along with the potential costs and what you can afford to pay, can benefit you now and over the long run. And, it can also help you find ways to cut down on the costs tied to your long-term care, like securing a long-term care insurance policy. This type of coverage can be critical as you age, as it helps cover the costs of your long-term care, whether that’s in a nursing home, an adult day care facility or via a home health aid.
But while this type of coverage can be crucial, it also comes at a cost. For example, the price of a long-term care insurance policy with $165,000 in benefits averages about $950 per year for a single, healthy 55 year-old man. The same policy and benefits average about $1,500 for a healthy woman of the same age. But the average price for the same policy for a 60 year-old man jumps to about $1,175 a year and increases to about $1,900 annually for a 60 year-old woman.
That’s just the average, though. And, depending on your age, health and other factors, the cost of long-term care insurance can be much higher or lower than the average. So what’s the most that experts say you should pay for this type of coverage?
Find out how much a long-term care insurance policy could cost you today.
What’s the maximum you should spend on long-term care insurance? What experts say
What long-term care insurance will cost you can fluctuate based on your age, the type of insurance you choose, where you live and more. But Alex Cruz, the owner of Matrix Insurance, says the maximum that you should spend on your long-term care insurance policy is not necessarily tied to a dollar amount, but rather, a percentage.
“There is no maximum amount [but] you shouldn’t spend more than 5 to 6 percent of your annual income [on] premiums,” Cruz says. “If you go beyond that, it will become a financial burden.”
When it comes to the maximum amount you should spend on a policy, the answer depends on each person’s circumstances, says Peter J. Landry, managing director of insurance and annuities at Wells Fargo.
“You’ll want to consider the average monthly amount of care, as well as the typical amount of time that care will be needed, which is approximately four to six years in most situations,” Landry says. “Sometimes care is needed for a longer period of time as well, so family history plays a role too in determining a suitable amount of coverage.”
With multiple factors impacting the cost, a good place to start is to figure out how much coverage you need from your policy. To determine this, you may want to utilize calculators online or talk with a financial advisor who can help you decide what the right amount is for you and your family.
Explore your top long-term care insurance options and compare the costs now.
When should you purchase long-term care insurance?
Many people wait to purchase a long-term care insurance policy until they get older. But waiting too long can have a big impact on the cost of your long-term care insurance.
According to Wilson Coffman, president of Coffman Retirement Group, says the best time to buy this type of insurance is when you hit middle age.
“The best time to purchase long-term care insurance is early in your adult life, between the ages of 45 and 55,” Coffman says.
And not everyone needs to purchase a policy, Coffman says. For example, high earners who have the assets available to pay for the cost of long-term care may not need this type of coverage.
Both Coffman and Landry also note that if you’re going to purchase this type of policy, it’s important to read your contracts carefully.
“One important factor to consider when purchasing a long-term care policy is whether or not payments from the contract, when needed, are reimbursement or indemnity based,” Landry says. “Indemnity [means] that receipts for care do not need to be submitted. Rather, the insurance company pays a specified amount each month to the policy owner, once they have qualified to receive policy benefits.”
The bottom line
Ultimately, the maximum amount you should spend on a long-term care insurance policy depends on a wide range of factors, so the answer to this question will vary based on your unique circumstances and who you ask. For many, it doesn’t make sense to spend more than 5% to 6% of your annual income on a long-term care insurance policy, but in some cases, you may need to spend a bit more to get the right coverage amount — and in some cases, you may not need coverage at all. So, as you weigh your options, be sure to take all of the factors into account to determine how much you should spend and how much coverage you need to ensure that you and your finances are protected.
Floodwaters pushed by the remnants of Hurricane Helene left North Carolina’s largest mountain city largely cut off Saturday by damaged roads and a lack of power and cellphone service, part of a swath of destruction across southern Appalachia that left an unknown number dead and countless worried relatives unable to reach loved ones.
In North Carolina alone, more than 400 roads remained closed on Saturday as floodwaters began to recede and reveal the extent of damage. North Carolina Gov. Roy Cooper said that supplies were being airlifted to that part of the state. Cooper said two people died in his state, Helene killed at least 52 people across multiple states.
Among those rescued from rising waters was nurse Janetta Barfield, whose car was swamped on Friday morning as she left an overnight shift at Asheville’s Mission Hospital. She said she watched a car in front of her drive through standing water and thought it was safe to proceed. But her car stalled, and within minutes water had filled her front seat up to her chest. A nearby police officer who saw her car stall helped her to safety.
“It was unbelievable how fast that creek got just in like five minutes,” Barfield said.
Erik Verduzco / AP
Early on Saturday morning, many gas stations were closed because they didn’t have electricity, and the few that were open had hourlong lines wrapped around the block. The hub of tourism and arts, home to about 94,000 people, was unusually still after floodwaters swamped neighborhoods known for drawing visitors including Biltmore Village and the River Arts District, which is home to numerous galleries, shops and breweries.
More than 700,000 power customers were without power across North Carolina, including 160,000 in Buncombe County. Interstate 40 and I-26 were impassible in multiple locations, and a state transportation department map showed that most routes into Asheville and across much of the mountains were snarled. North Carolina’s Department of Transportation posted on social media on Saturday afternoon that “all roads in Western North Carolina should be considered closed.”
In Asheville, there was no cellular service and no timeline for when it would be restored.
“We have had some loss of life,” County Emergency Services Director Van Taylor Jones told reporters. However, he said they were not ready to report any specifics. Officials have been hindered in contacting next of kin by the communications outages. Asheville police instituted a curfew from 7:30 p.m. Friday to 7:30 a.m. Saturday.
“The curfew is to ensure the public’s safety and will be in effect until further notice,” police said.
Asheville transit services were also suspended, police said. The city advised residents to boil “all water used for human consumption,” as there was at least one significant water line break during the storm. Many residents might not be getting water or reduced or no pressure water.
Jones said the area experienced a cascade of emergencies that included heavy rain, high winds and mudslides. Officials said they tried to prepare for the storm but its magnitude was beyond what they could have imagined.
“It’s not that we (were) not prepared, but this is going to another level,” Sheriff Quentin Miller said. “To say this caught us off-guard would be an understatement.”
Erik Verduzco / AP
Atlanta resident Francine Cavanaugh said she has been unable to reach her sister, son, or friends in the Asheville area.
“My sister checked in with me yesterday morning to find out how I was in Atlanta,” she said on Saturday. “The storm was just hitting her in Asheville, and she said it sounded really scary outside.”
Cavanaugh said her sister had no idea how bad the storm would be there. She told Cavanaugh she was going to head out to check on guests at a vacation cabin “and that’s the last I heard of her. I’ve been texting everyone that I know with no response. All phone calls go directly to voicemail.”
The CEO of a hospital operator that filed for bankruptcy protection in May will step down after failing to testify before a U.S. Senate panel.
Steward Health Care CEO Ralph de la Torre has overseen a network of some 30 hospitals around the country. The Texas-based company’s troubled recent history has drawn scrutiny from elected officials in New England, where some of its hospitals are located.
A spokesperson for de la Torre told the Associated Press Saturday that he “has amicably separated from Steward on mutually agreeable terms” and “will continue to be a tireless advocate for the improvement of reimbursement rates for the underprivileged patient population.”
A CBS News investigation that spanned nearly two years documented how private equity investors and de la Torre extracted hundreds of millions of dollars while healthcare workers and patients struggled to get the life-saving supplies they needed.
In August, the company closed two Massachusetts hospitals, leaving about 1,200 workers jobless, according to the state.
Sen. Bernie Sanders of Vermont, who chairs the Senate Health, Education, Labor and Pensions Committee, said earlier this month that Congress “will hold Dr. de la Torre accountable for his greed and for the damage he has caused to hospitals and patients throughout America.”
De la Torre’s resignation is effective Oct. 1. The Senate approved a resolution on Wednesday that was intended to hold him in criminal contempt for failing to testify before a committee.
The Senate panel has been looking into Steward’s bankruptcy. De la Torre did not appear before it despite being issued a subpoena. The resolution refers the matter to a federal prosecutor.
Kayla Bartkowski/The Boston Globe via Getty Images
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