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What to consider when long-term care planning

Long-term care planning is important for people in New Jersey to consider while they are still competent enough to do so. For example, they may need to execute legal documents to name who will make decisions on their behalf if they become incapacitated. Also, they will need to decide what kind of elder care they will want as they age, and how they will pay for such care.

One way to pay for long-term care is through an insurance policy. In a traditional long-term care insurance policy, a policyholder would pay a premium each year, and should they need to enter a nursing home or need in-home care, their policy would cover at least some of the costs. However, it often only provided benefits for a certain number of years. These policies have become less popular these days, and while at one time more than 100 insurance companies sold long-term care insurance, now under 15 still do.

However, another choice for long-term care coverage that has become more popular is a whole life insurance policy. Though these policies a policyholder can pay for their long-term care needs, and if they do not end up needing to do so, then the policyholder's beneficiaries will receive a payout upon the policyholder's death. That being said, whole life insurance policies can be up to three times more costly than traditional long-term care insurance.

In addition to planning on how to pay for long-term care, a person will want to consider the fact that many times a person who needs long-term care may not be able to handle their medical or financial affairs. For example, a person with Alzheimer's or dementia would not have the mental capacity to determine what care they need. Therefore, it can help to execute a financial power of attorney and a healthcare power of attorney. These legal documents can name who will make decisions on the person's behalf if the person becomes incapacitated.

Long-term care planning has many facets. A person will have to plan for what type of long-term care they'd like, how they're going to pay for it and who they want to make medical and financial decisions on their behalf if they are unable to do so themselves. In the end, it's important to have a comprehensive long-term care plan that will meet your needs as you age.

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