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Long-term care planning and the rising cost of insurance

Some residents of the District of Columbia who have long-term care insurance policies may have noticed that the premiums on those policies are rising dramatically. At least part of this premium rise is because insurance companies that sell these policies failed to account for the growing number of people who actually use them. This rise in cost has added a new wrinkle in long-term care planning.

The average age of the population of the United States has risen in the recent past. This means that more people are in need of long-term care toward the end of their lives. For those who realized that Medicare and Medicaid would not cover all of the costs associated with aging, many purchased insurance policies to pay for their care.

Now that premiums are rising to meet the demand for the insurance, many people are wondering if having long-term care insurance is even worth it anymore. For some people, the increase could prompt a reduction in benefits in order to keep cost down. Others may decide that the policy is no longer worth the cost. For them, it may be possible to still receive benefits equal to the amount the policy is worth when it is terminated.

All of the possibilities and options need to be weighed before cancelling a long-term care policy. Additional long-term care planning may help offset the cost of elder care. Every District of Columbia resident's circumstances are different. Fortunately, it is possible to tailor such planning to meet the needs of an individual depending on his or her financial ability and expectations for the future.

Source: The Boston Globe, "As premiums rise, should you drop long-term care?", Ann Carrns, March 23, 2014

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