Tuesday

Long Term Care Insurance Is A Bad Deal

Insurance was invented to be a hedge against catastrophe.  Home insurance is a hedge against a fire or flood.  Term life insurance is a hedge against you dying early in life and not able to support those needing your support.  Those are insurance worth buying.

BUT a whole rash of 'insurance products' grew in the 1960's including whole life this, and annuity that.  This is insurance you can do without.

AND long term care insurance is a bad deal as well.  

Like any insurance product, long term care insurance can be useful and yes, there are people who benefit but the rewards are far outweighed by the risks and the costs.

First off, the average policy is $3500 a year, yikes, then, you are not covered before 90 days in a nursing home or care facility.  70% of seniors that are admitted into any kind of facility that is covered are released within 90 days anyway.

Remember that $3500 a year for 20 years at 6% is $147,669 and that buys a lot of care if you need it and if you don't, it's all yours, not the insurance company.