Long-term care questions to consider

A long-term care insurance policy pro-vides the funds to pay for the care people need when they need it — whether it is tomorrow or 20 years from now.

A long-term care insurance policy pro-vides the funds to pay for the care people need when they need it — whether it is tomorrow or 20 years from now.

One of the most common objections to buying long-term care insurance is the notion you can pay for long-term care services yourself if and when those services are needed.

But experts say there are many reasons self-funding may not be in your best interest. Ask yourself these six questions:

• What about your spouse? Even if you think you have enough money to pay for long-term care, think about what will happen if you need care for several years and the financial impact on your spouse’s retirement and future care.

• Have you considered the tax implications? Most people do not have money set aside specifically for long-term care. That means they may have to liquidate assets.

When that happens, capital-gains tax, income tax and potential penalties can all take a bite out of the returns those assets were expected to generate.

• Are you prepared to invade your plan? People with significant assets generally have a plan for those assets. No one wants to use money that’s been set aside for retirement or a child’s inheritance to pay for long-term care services. You do not want to have to cash in an asset meant to fund something else.

• Have you thought about the cost of lost opportunity? Even if you have funds specifically to pay for long-term care services, that money must be invested so there’s enough available to pay for care 10, 15 or 20 years down the road. That could require setting aside a large sum or investing conservatively to ensure money will be available when needed. If you purchase long-term care insurance, you may be able to invest more aggressively and earn higher returns on your retirement nest egg.

• Can you really save enough? There are a lot of “what ifs” when it comes to investing your own money to pay for long-term care services. What if you do not save enough? What if your assets do not earn enough interest? And the biggest “what if”: What if you need long-term care tomorrow?

There is no guarantee anyone will have 10 or 20 years to save.

• Are you sure you will get the care you need? Most people who say they will self-fund are reluctant to use long-term care services because they know the cost is coming out of their own pockets.