Is Long-term Care Insurance a Good Plan?

by Lisa Baker

One of the common symptoms of old age is loss of independence, partial or total. The five basic actions of everyday life become burdens for the person who suffers from them. Getting up, getting dressed, eating, taking a shower or a bath, shopping … long-term care insurance is a provident contract, which allows you to anticipate a future in which you, too, may lose your independence. But is this a good tip? Decryption.

Several insurance models

Partial dependence

We consider a person to be in a state of partial dependence from the moment when it becomes impossible for them to perform two of the five basic daily actions. By having subscribed to long-term care insurance, the person will pay a monthly contribution of an amount between 20 and 100 euros.

This will be valid until it reaches the total ceiling fixed in advance in the contract. The person considered to be partially dependent will benefit from an annuity corresponding to 50% of the total amount provided for in the case of total dependency (amount which can be up to 1500 euros per month).

Heavy (or total) dependence

Anyone deprived of their ability to perform at least four of the five basic actions of daily life is considered to be heavily dependent. She will therefore benefit from the entire pension provided. The latter will be necessary to finance constant home help and / or placement in a specialized center. It will also count for various health-related expenses.

The advantages of long-term care insurance

In view of the statistics, the existence of long-term care insurance in France appears obvious. More than a million elderly people are today considered to be dependent. In addition, nearly 20% of the French population is now over 65!

This insurance provides that you can take out it from the age of 40, which gives you ample time to anticipate your future. But even until the last quarter of your seventieth decade, you won’t have too much trouble finding an insurer willing to sign up with you .

By subscribing, you guarantee yourself:

  • An ad vitam aeternam long-term care pension
  • A daily support service during your period of dependency
  • A capital will allow for example the preparation of your funeral
  • Expert advice to prevent loss of autonomy
  • Greater serenity in the family circle, the possible burden of dependence being – at least partially – taken care of.

So much for the benefits. But long-term care insurance also has other facets.

Significant black dots

Whatever insurer you choose, and whatever the terms, ultimately it will never be anything other than a non-refundable contract. In other words, by subscribing you take the risk of never becoming dependent and therefore, of contributing for nothing.

And even if you become superficially dependent, all the part of the capital constituted by your contributions that you will not have had time to receive in the form of an annuity before the day of your death, will not be paid to your heirs but will be pocketed by the insurer. In such conditions, it seems preferable to take out life insurance, through which you can choose to receive all of the accumulated capital at once.

Another gray area of ​​long-term care insurance is found in the clauses that mark out many of these contracts. It is not uncommon for these clauses to be worded somewhat underhanded. For example, it may not be specified that a contribution is not guaranteed over time and is likely to increase from year to year.

It can also be overly long support times, which is like paying a fortune in a restaurant for poor table service. It can even go as far as false clauses forbidding you to go to court when it is your strictest right. A word therefore: caution with long-term care insurance!

It can be of great help, of course, but other solutions, as long as they are possible, are also worth studying, especially if you do not have a job that is dangerous for your health and if there is no history of loss of independence in your family as you approach old age.

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