Long-Term Care Insurance: The Cost-Benefit Analysis

In the life of each person, some priorities are given preference. For many people, it is their health and family, for others, it is work or friends. People are forced to choose between them and sacrifice one for the other. Human health is an integral part of a person’s life and directly affects one’s ability to fulfill essential goals such as ones or career. Therefore, many people resort to health treatments and pharmaceuticals to ensure their stable health for other purposes. However, this lifestyle can lead to long-term care for an extended period of time.

Regarding the cost of long-term insurance, it is essential to consider individual cases. The person who works will receive a particular financial benefit. The cost-benefit of purchasing long-term care insurance is preserving a person’s current performance or income. Although one will spend money on long-term care insurance, it will allow them to work and remain productive to achieve new financial goals. For the elderly, the long-term cost can be paid by various mechanisms. According to Luk (2020), “LTC can be funded by general taxation, social insurance, and means-tested ‘safety net’ mechanisms” (p. 12). It makes long-term insurance available to most older people.

In terms of an aging population, it is essential to note when a couple of older adults can partially take care of each other. Hence, in contrast to individuals, acquiring long-term care insurance for older adult couples may not be necessary and will not justify the cost of purchasing it (Luk, 2020). Another question concerns the protection of assets by this insurance option. According to Matthews (2020), “all insurances companies sell dollar-for-dollar policies that cover assets equal to the amount of benefits paid under the policies” (p. 52). Therefore, it can be concluded that this insurance option would completely protect assets, but one needs to pay attention to the features of insurance companies.

References

Luk, S. C. Y. (2020). Ageing, long-term care insurance and healthcare finance in Asia. Routledge.

Matthews, J. (2020). Long-term care: How to plan & pay for it. Nolo.