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Can you use your long-term care insurance if you retire overseas?

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Increasingly, Americans are choosing to spend their retirement years living abroad. Between 2003 and 2013, the number of people receiving their Social Security benefits outside the U.S. grew by 50 percent.

There are certainly many advantages to embracing the life of an expat, even if you simply go north or south of the border. However, there are also practical considerations that you should investigate before you make that move. One of those is your long-term care insurance.

If you retire abroad, you won't lose your LTC policy as long as you continue to pay the premiums. The problem may come if and when you need to use it. In insurance vernacular, is the policy "portable" to your new home country?

There's no one, easy answer to that question. In some cases, insurers will pay partial benefits for care abroad and/or cover care in another country for a specific period of time. Portability can also vary by country. You're more likely to be able to use it in Canada and possibly the United Kingdom than in other countries.

However, you'll need to do some research to find out. The information can often be found in the "Exclusions and Limitations" section of your policy. There may also be a section on international benefits.

One reason for these limitations on LTC insurance portability abroad is that private health insurance, including LTC insurance, is a rather uniquely American phenomenon. In many countries, long-term care benefits are part of the universal health coverage. American insurers often have no mechanism by which they could pay benefits to nursing homes and other care providers.

Don't drop your current policy until you find out what your options are and decide how you're going to cover long-term care should you need it. You may want to hold off doing anything until you've lived in your new country awhile and are sure this is where you want to stay. You may decide that if you are unable to care for yourself you'd rather return home. The cost of care in many places abroad is much lower than in the U.S., so some people who would require LTC insurance if they stayed here can get by without it abroad.

Attorneys and insurance professionals who work with LTC policies can provide useful advice. Whatever you do, don't drop your current policy until you've decided on another alternative -- whatever that is.

Source: Bankrate, "If you retire abroad, will your long-term care insurance go with you?," Jay MacDonald, accessed July 27, 2015

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