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Maintaining Appropriate Levels of Health Insurance
If your employer doesn’t offer the coverage or you’re self-employed, Weston recommends seeing if you can buy a policy through a profes- sional or trade organization you may belong to, or possibly forming your own group of at least 10 people to qualify for a discounted rate. If your only alternative is to purchase a policy yourself, be sure to get enough coverage. Most insurers won’t provide benefits that replace more than 60% to 70% of your income, but choose the highest percentage you can get.
4 . Long-term care insurance
Long-term care insurance, says Weston, covers the costs of serious illness that aren’t picked up by regular health insurance or Medicare, the government health program for people over 65. If you can’t properly feed, clothe or bathe yourself and need an aide to help you, long-term care insurance pays the bill. But it can be expensive. For example, nursing home care costs around $40,000 a year and even more if the care is provided at home. Most people need long-term care for two years or less, although some people need help for 10 years or more.
Weston says people with $1 million or more in assets can usually pay for their own long-term care, but some people buy the policies anyway to ensure they have money left over for their children's potential inheritance. Preserving an inheritance is also the reason some people buy policies for their parents.
Experts disagree on when it makes sense to buy a policy. You’ll pay less for coverage if you buy it when you’re in your 40s, but the savings from doing so may be negligible since you’ll be paying on the policy for many more years before you actually need it. But if you buy a policy too late (after age 65), you’ll pay a lot more. Monthly premiums for a 65-year-old are generally two to three times higher than the same policy for a 50-year-old. Although recommendations vary, the best time to buy long-term care insurance seems to be between age 50-60.