Long Term Care Insurance

Jul 11, 2016

Long Term Care Insurance

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Growing older is a time when our health can become the focus of our lives; along with making sure we plan for the future of our well-being. It may be that you are completely healthy, even in your elderly years, however, it’s likely that even the most physically fit people will eventually need some kind of long-term care.

Because life is uncertain at times, the earlier you plan for your long-term care the easier, and cheaper the transition will be. Although there are several methods of covering the costs of senior care, one of the most efficient and reliable choices is to buy a long-term care insurance policy.

Long-term care insurance was developed specifically to guarantee that seniors receive care at their choice of a nursing home, assisted living facility, home health care option, or other long-term services not covered by traditional health insurance.

Long Term Care Insurance Policies

The vast majority of policies sold today are comprehensive policies, typically providing coverage for various services found within each senior care option. These services can include:

  • Occupational, speech, or physical therapies
  • Rehabilitation therapies
  • Personal care
  • Homemaker services
  • Adult day health care centers
  • Hospice care
  • Respite care
  • Alzheimer’s or memory care
  • Skilled nursing care 

As is the case with most insurance policies, long-term care policies have specific exclusions. State regulations often dictate which exclusions are allowed, varying in different parts of the U.S. Generally, long-term care policies exclude:

  • Care provided by family members
  • Care outside the United State (although a growing number of policies do have international care benefits)
  • Care as a result of war or acts of war
  • Care resulting from attempted suicide or self-harm
  • Drug or alcohol treatment
  • Treatment in a government facility
  • Medicare, government programs, or worker’s compensation services

When Should You Buy Long Term Care Insurance?

Considering that old age brings a higher probability of encountering health issues, long-term insurance policies are cheaper the earlier they are purchased. People don’t often think about their future care needs when they are healthy, yet waiting to buy a policy can leave fewer options and be more financially draining.

According to a study by the U.S. Department of Health and Human Services, over 70% of people over age 65 will need some form of long-term care. Without insurance, the later years of life can be financially devastating for seniors and their families. Typically, long-term care costs breakdown to:

The most appropriate time for most people to buy long-term care insurance is around 50 years of age. During this time in life, it is more probable that an individual will have both the funds and foresight to make a proper investment in a long-term care policy.

Generally, the best rates and services are available when a person is still healthy because insurance companies have fewer liabilities to consider. 

Other Options and Considerations

Before purchasing a long-term care insurance policy, there are numerous other items to consider. To start, you’ll want to decide what amount of money is needed for the type of care you are planning for. Certain policies will allow you to choose anywhere from $50 a day to as much as $500. During this step, it is important to decide on the other benefits and services you may need for each type of facility you plan to utilize.

Inflation Protection

Another key feature to consider is inflation protection for your policy. After taking into account the estimated amount of the coverage you may need, you may find that the rates for senior care have increased (which is very likely) between the time of your purchase and the need for care.

Joint or Share-care

For married couples, there is also the option to buy joint long-term care, or “share-care” as it is sometimes known. These policies pool the total amount of coverage between two people to provide reasonable rates and services. If a spouse passes on, the remaining policyholder will get those unused benefits added to the remainder of their coverage.

Overall, long-term care insurance can be a very wise investment, especially when you’re already in good health. Should you remain independent without any drastic changes to your health, it may be possible to sell these policies back to the company. However, there is something to be said about the peace of mind and financial stability that comes with a solid plan for your long-term care.

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Frequently Asked Questions

Due to our financial situation, I simply cannot afford to put my parents in a home, but having them live with me isn’t exactly ideal. Are there any other affordable options?

We realize that senior care communities can be costly, but there are a few things to be considered. Many healthcare providers will help offset the costs of moving to a senior care community. If that’s still not financially possible, look into having a home care aid come to your parents' house a few times a week. These home care aids can be hired through an agency or independently and can provide a variety of services to take care of senior loved ones. Don’t let money get in the way of providing the care your parents deserve.

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I think my mother might need long term care in the foreseeable future but I do not know how we will be able to pay for it. What options are available?

Paying for long-term care can be daunting. However, fortunately, there are many options available to help. Depending on your loved ones personal and financial situation these options can range from Medicare and Medicaid to Life Insurance, to VA Special Pensions. Take a look at this article to learn more about what options may be available to you.

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