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Facing the possibility of spending your twilight years in a nursing home can be scary, especially if you aren’t certain whether you’ll be able to afford a good facility or leave your most valuable assets to your heirs when you pass.

A long-term care insurance policy can offer a solution for such concerns, but it doesn’t come without a few drawbacks. Before purchasing one, you should consider the advantages and disadvantages and understand exactly what you stand to get from such a policy.

What is a long-term care insurance policy?

A long-term care insurance policy is similar to a term life insurance policy. The primary difference is that instead of paying your heirs upon your death, it will go to cover your nursing home costs if you end up in long-term care due to disability.

Advantages of a Long-Term Care Insurance Policy

The major advantage of this type of insurance is that it can pay for your long-term care costs if the policy activates. Because it covers the expenses associated with staying in a nursing home, it prevents your other assets from being seized by the facility. You’ll never be at the mercy of Medicaid to pay for your care since it’s already covered.

Purchasing long-term care insurance to cover the costs of moving into a nursing homey this policy rather than relying on Medicaid will also enable you to get into a better care facility. Many nursing homes don’t accept Medicaid, and the ones that do are often characterized by fewer amenities and subpar care.

Disadvantages of a Long-Term Care Insurance Policy

As useful as long-term care insurance can be, it’s not without disadvantages. The most notable of these is cost. Long-term care insurance is notoriously expensive, often costing thousands of dollars per year in premiums. And like other types of insurance, it has no cash value, despite its cost.

As with term life insurance, there’s also no guarantee that your policy will ever pay out. You can’t claim it to pay for senior care if you don’t need it for medical reasons such as disability — it only activates if you lose the ability to perform daily activities without assistance.

While partial or full disability is an eventuality for most seniors, it may happen well after you would prefer to join a retirement community. By relying on this type of policy to pay for your long-term care, you’re guaranteeing that you won’t live in a senior home until you need help with daily activities.

The final disadvantage of long-term care insurance is the same one that exists with any type of insurance: the insurance company has the power to deny or cancel your coverage by claiming that your situation doesn’t qualify.

You can fight the insurance company in court if you think your coverage has been denied unfairly, but doing so may be difficult if you’ve reached a point where you can’t perform daily activities without assistance. It’s also likely a fight you’d rather not have, especially if you purchased the policy specifically to make this time of your life easier.

Consult with a Qualified Elder Planning Attorney

Due to the high cost and potential drawbacks of long-term care insurance, it’s wise to speak with an insurance law expert before taking out a policy. The elder planning and real estate lawyers at Merlino & Gonzalez in Staten Island, NY, can help you understand your options for long-term care.

If you decide to purchase a policy after exploring these options, your attorney can help you choose a policy that best fits your needs and make sure your insurance company treats you fairly when your policy activates. Get in touch with our dedicated team today.