Should Newlyweds Invest In Long Term Care Insurance?

by Tamila McDonald
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long term care insurance pros and cons

Getting married means entering a new financial paradigm. While most couples simply focus on combining their finances, it’s also critical to re-evaluate your insurance needs. Ideally, you want to include long-term care insurance in that equation. If you’re wondering, “Should newlyweds invest in long-term care insurance,” “What are the long term care insurance pros and cons,” or anything similar, here’s what you need to know.

What Is Long-Term Care Insurance?

Long-term care insurance is a policy that helps cover costs relating to specific, ongoing services for chronic medical conditions. In many cases, long-term care insurance provides coverage for in-home caregiving, assisted living, nursing homes, and similar services that aren’t traditionally covered by conventional health insurance.

Pros and Cons

As with any optional policy, there are long-term care insurance pros and cons newlyweds should consider. Here’s an overview.

Benefits of Long-Term Care Insurance

One of the advantages of long-term care insurance is that it provides a significant amount of peace of mind. You won’t have to worry about whether you and your spouse can afford the cost of long-term care services. Since long-term care isn’t typically covered by health insurance, the financial burden is steep if you don’t have coverage.

Plus, the majority of Americans do need some long-term care at some point in their lives, particularly once they’re age 65 or older. In many cases, that alone makes long-term care insurance worthwhile.

Long-term care insurance purchased privately is often highly customizable. Along with setting coverage amounts, some offer inflation protection, allowing the coverage to increase in conjunction with rising prices.

When you use long-term care insurance, any payments made through the policy to handle any qualifying expenses are tax-free. In many cases, the premiums are also tax-deductible, though there are limitations.

With long-term care insurance, you also have a plan to ensure your needs are met. That can reduce the burden on family members who may otherwise need to provide supportive care, as you’ll have access to more ongoing professional services that reduce what family members need to handle.

Finally, by acquiring long-term care insurance sooner rather than later, your annual premium is usually lower as long as you maintain the same policy. While the price may increase, it may go up less than you’d spend if you had to get a new policy. As a result, you’re reducing the odds that long-term care insurance becomes cost-prohibitive down the road.

Drawbacks of Long-Term Care Insurance

When it comes to drawbacks, the biggest is that you could end up paying monthly premiums for a long time without using the policy. Most people don’t use this type of coverage until they’re well into retirement. As a result, if you’re relatively young, you could spend a lot over your lifetime if you don’t experience an event that allows you to use the coverage earlier than you’d expect.

Second, pricing isn’t particularly stable. Companies may quote couples wildly different rates for similar coverage. While you can typically overcome this by shopping around, it’s potentially frustrating to deal with so much inconsistency.

Third, if you get long-term care insurance from an employer, changing jobs typically means having to get new coverage elsewhere. Depending on your age, when you switch, that could mean a sudden and dramatic increase in your monthly premiums.

Additionally, long-term care insurance often has waiting periods after an incident, such as the start of an illness or the date of an injury. As a result, you could end up going into long-term care and finishing your stay before your insurance kicks in if ongoing care isn’t required after a month or two.

Further, it isn’t always easy to determine how much coverage you’ll need. The cost of long-term care services changes over time, and it’s hard to predict what pricing will look like at the time you may need the policy. As a result, it’s easy to accidentally over or undershoot.

Lastly, there’s always a chance that you’ll never use the policy. While that’s true of many types of insurance, some find this discouraging.

It’s also critical to note that not everyone is eligible for coverage. Certain health conditions may be disqualifying. For example, individuals with pre-existing cancer, dementia, and heart disease are often ineligible.

How to Buy Long-Term Care Insurance

In most cases, newlyweds have two primary options for buying long-term care insurance. First, some employers offer policy options as benefits to employees. With these, the employer may even cover part of the premium, though that isn’t always the case. Still, pricing may be lower, as some companies can negotiate reduced rates if there is a large enough number of participating employees.

Second, you can purchase long-term care insurance privately directly from an insurer or through an agent. If you go with the former, make sure to get quotes from several reputable insurance companies. If you prefer the latter, work with an agent that can source policies from at least three different insurers.

When you purchase long-term care insurance, you’ll typically need to complete an application that includes a health questionnaire. In some cases, insurers also request copies of medical records and conduct interviews to assess your health in greater detail.

Using These Benefits

After you have a policy, accessing the benefits usually means you need to experience a qualifying event and meet certain conditions. For most insurers, coverage won’t begin until you are unable to do at least two activities of daily living (ADLs) – such as bathing, dressing, eating, or transferring – or you develop a cognitive impairment, such as dementia.

Once you meet the requirements, there’s also a waiting period before your benefits state. You may need to pay for long-term care on your own for between 30 and 90 days, depending on what’s stipulated in your policy. Once that time – which is referred to as an elimination period – passes, you’ll start receiving your benefits.

Should Newlyweds Invest in Long-Term Care Insurance?

For younger newlyweds, investing in long-term care insurance might seem unnecessary. However, there are plenty of reasons why it’s better to get it now rather than later.

First, long-term care insurance premiums are usually lower when you’re younger. If you can lock in your rate, it could allow you to pay far less per month than you would if you waited, making long-term care insurance far more affordable.

Second, anyone can fall suddenly ill or experience a life-altering accident. While the risk of such an incident is higher if you’re older, one could happen at any age. If covering the cost of care out of pocket isn’t an option, then having long-term care insurance gives you a safety net against a potentially catastrophic event. With the coverage, you have financial help, ensuring a difficult situation isn’t any harder than absolutely necessary.

Additionally, it’s critical to get coverage for both spouses, regardless of whether everyone is employed. Unlike life insurance – which is far more critical for an income-earning spouse – the cost of long-term care is impactful even if a stay-at-home spouse is the one requiring treatment and the income-earning spouse can keep working.

Finally, it’s crucial to remember that traditional health insurance usually won’t cover long-term care expenses. As a result, even if your health insurance is relatively comprehensive, you won’t get any financial assistance from them for costs of this nature.

By having long-term care insurance, newlyweds are protecting themselves financially from potentially catastrophic events. As a result, it’s wise to invest in long-term care insurance, regardless of your age.

Do you think that the long-term care insurance pros and cons make it a wise investment overall? If you don’t have long-term care insurance, did you make that decision for a reason other than cost, or was it a purely financial decision? Share your thoughts in the comments below.


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