Long-Term Care Insurance: What You Need to Know

 

Long-term care refers to the many services beyond medical care and nursing care used by people who have disabilities or chronic illnesses. Long-term care insurance helps you pay for these very expensive services. It also guarantees that you can make your own choices about the long-term care you receive.

 

People are living longer which increases the risk of serious health problems; all of which could cost you your life's savings. Unfortunately, health insurance policies and Medicare do not normally pay for long-term care. Medicaid will only do so if you have spent most of your savings and exhausted your assets. If you pay out of pocket, you'll spend $140,000 on average. This is where long-term care insurance comes into play.

 

Long-term care insurance typically covers the cost of:

  • Help in your home with daily activities like bathing, dressing, eating and cleaning.

  • Community programs, such as adult day care.

  • Assisted living services that are provided in a special residential setting other than your own home. These services may include meals, health monitoring, and help with daily activities.

  • Visiting nurses.

  • Care in a nursing home.

Unfortunately, most people don't think about long-term care until they are advanced in age and their health has begun to fail. At an advanced age, you will be considered too high a risk for coverage. If you do manage to qualify, the premiums will be exorbitant. Therefore, the best time to obtain long-term care insurance is during middle age. During that time, you have the highest likelihood of qualifying for a policy at a reasonable premium.

 

Long-term care insurance is not for everyone, however, as health care costs climb, insurers become increasingly restrictive with coverage and eligibility. With the uncertainties of our health, and the possibility that we may outlive our assets, it is a prudent idea to investigate long-term care insurance. If you are reading this, you are already preparing to plan your estate. Long-term care insurance can be an integral part of your plan, as you take steps to protect your assets, minimize your dependence on other family members, and control where and how you receive long-term care services.

 

However, long-term care insurance is expensive. A 65-year-old individual in good health can expect premiums between $2,000 and $3,000 a year for a policy. Premiums usually adjust for inflation, so the cost will like rise as time passes. If the cost of premiums will lower your standard of living, you may decide that long-term care coverage is not for you.

 

If you elect to obtain a long-term care policy, be sure the policy does the following:

  • Clearly explains when you will be eligible for coverage and how your eligibility will be determined.

  • Does not require that you spend time in a hospital before receiving benefits.

  • Will be renewed as long as you pay the premiums.

  • Lets you stop paying premiums once you begin receiving benefits.

  • Automatically covers pre-existing conditions if you disclosed them when you applied.

  • Offers choices for inflation protection including an automatic increase in your benefit on an annual basis or a guaranteed right to increase your benefit.

  • Allows you to downgrade your coverage if you cannot afford the premiums.

  • Includes coverage for dementia.

  • Provides at least one year of nursing care and home health care coverage.

  • Allows the right to cancel the policy for any reason with 30 days of purchase and receive a refund.

Long-term care insurance may not be for you for any number of reasons, but it is important that you are aware of all your options as you conduct your estate planning. Please call 216.225.9181, Email, or use the contact form to schedule a consultation.