News Private long-term care insurance: necessary or a waste of money?

News Private long-term care insurance: necessary or a waste of money? News always well informed

Friday the 01.07.16 , written by Jessica D’Ovidio Is private care insurance really necessary? The Bremen financial analyst Volker Looman answers this question extremely critically and with many figures in the online edition of the Frankfurter Allgemeine Zeitung. These should show that not a long-term care insurance but the will to save is the right precaution for old age. >

Pflegeversicherung: Notwendig und individuell abgestimmt Timely provision protects against financial distress in case of care

Is a long-term care insurance required? It is not necessary for the financial analyst Looman. He goes even so far that not even persons who have no private reserves for the care case, provide with a private long-term care insurance in case of emergency. In his opinion, much more important than this insurance is a lack of consumption and the will to save . This would be best prepared for the age. The analyst appeals to the individual responsibility of individual citizens and prefers to increase the contributions of top earners for the statutory long-term care insurance. But with private savings plans, everyone can equally close the high cost gap , which arises in the care case?

Attention: Only very few people are willing to give up consumption. Even saving is difficult for many. Correspondingly large is the risk that the reserves set up for the care case will be spent on other things. With a private long-term care insurance, the money earmarked for care provision actually benefits this goal. With a non-binding offer for long-term care insurance, you can find out which tariffs belong to your shortlist.

Private care insurance necessary or rather sell the home?

Depending on the degree and duration of care, the care costs can result in a pension gap of several thousand to one hundred thousand euros after ten years. But these figures are not as dramatic as they look. After all, people in need of care could sell their own home – anyone in need of care will not have any more, Looman says. On the other hand, how people should raise the money for care, who do not have their own house, remains open.

On the other hand, if you do not have your own fortune, you should rely on the state . A private care insurance would therefore hardly necessary. If necessary, the children are dependent. However, studies show that many elderly people do not want to be a burden to their children. Accordingly, “private supplementary care insurance may be useful in individual cases to provide for the private expenses in the care,” explains the consumer center Saxony-Anhalt.

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When is a private long-term care insurance required?

Consumers should always provide collateral for old age and sickness – that is what the financial expert advocates. He is certainly right. But why, of all things, the private nursing care insurance should not be necessary, but where just she takes into account the peculiarities of nursing , is not presented in sufficient detail.

For example, the financial expert disregards a feature that is characteristic of insurances: they are safeguards for the uncertain case , which nobody knows if it will actually happen. If, for example, an insured person unexpectedly suffers a stroke at the age of 55 and becomes a long-term care case, he is in any case financially secure with long-term care insurance. This happens regardless of how much the person concerned has previously spent on retirement or long-term care.

Prefer savings plans of private long-term care insurance?

Another drawback in Looman’s calculations is the optimistic estimate of interest rates on private savings plans . He reveals how insurers are calculating to provide their insured with benefits that translate into just under six percent return on their paid-in contributions. He himself assumes that private individuals have this chance of winning. However, with fixed income or very safe term deposit accounts, such return prospects are unrealistic. Looman therefore indirectly recommends private individuals to invest a little more risk – for example by investing in equities or real estate. However, those who have to resort to the money they have invested overnight can also be unlucky with their returns during a stock market slump. Here is a private care insurance makes more sense.

Long-term care insurance: benefits can not be substantiated by numbers alone

No one wants to give up financial lethargy just because he saves money on long-term care. But the author wants to motivate the readers. However, he advises to financial measures that can be quickly thwarted by unforeseen blows of fate. In such a case, those affected must really sell the apartment or house, or let the state pay for the care. For many people, for example, the task of their own home, where the memories of the whole family hang, but only the very last resort. The emotional burden , which then comes next to the nursing care on those affected, overlooks the analyst.

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  • Jessica D’Ovidio
  • editorial staff

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