5 Things You Need to Know About Long Term Care Insurance

By November 16, 2015 July 12th, 2019 Personal Insurance
5 Things You Need to Know About Long Term Care Insurance

What happens when someone you love needs round-the-clock care? Can they afford that level of support? Can you afford the time (or money) to help make that happen?

If you become ill or disabled, regardless of your age, are you financially prepared to handle the expense to care for your needs? Are you willing to have your family take on that responsibility?

A recent study of 1,849 wealthy investors found that 42% cited becoming a burden to their children as a top fear. That may not be an unfounded fear as it is estimated that 70% of individuals over the age of 65 today will need some type of long term care. However, in 2014, only about 1.5% of the population had the foresight to be covered by a LTC insurance plan.

November is Long Term Care (LTC) Awareness Month. How much do you know about this crucial insurance coverage? Read on for some important information.

1. Many Don’t Know What Long Term Care Is

When you think of LTC, you might think of medical care in a nursing home setting. In reality, this term encompasses all of the services and support an individual might need for personal or custodial care, often referred to as activities of daily living (ADLs). The six ADLs are eating, bathing, dressing, toileting, transferring (getting in and out of beds and chairs), and continence. Cognitive impairment is often regarded as a separate benefit trigger. This includes care in and outside of the home, as well as assisted living facilities, senior housing, residential care facilities, and other care arrangements.

2. People of All Ages Can Require Long Term Care

We often think of long term care as something for the elderly, the truth is that 40% of LTC recipients are under the age of 65. Individuals who have been in an accident or suffer from a debilitating chronic illness may require care beyond what family can provide.

3. Long Term Care Is Expensive

According to Genworth’s 2015 Cost of Care Survey, the national average cost for long term care can range from $45,760 (home health aide) to $91,250 (private room in nursing home) per year. In some parts of the United States, these numbers are significantly higher. Care in the Northeast can run well over $100,000 per year for a semi-private room in a nursing home.

4. Medicare Isn’t the Answer

Medicare will often cover the cost of medical care for a person who is over the age of 65 or is disabled. However, it does not cover charges for custodial care, or room and board in a care facility. In order to be eligible for Medicaid your income must be limited and your assets typically cannot be over $2,000. Without LTC Insurance, an individual would need to spend down until they become medically needy, as defined by their state’s program. Any assets a person intended to leave to a loved one such as a house or cash will need to be used to pay for care.

5. LTC Insurance Can Help

There are many different types of LTC Insurance and an experienced agent can help find the plan that fits your situation. Choosing insurance wisely can protect your assets and allow you to stay in your home and retaining your independence as long as possible while still affording you the care you need. There are plans that cover care inside the home as well as adult day service, assisted living care and nursing home care. Coverage can also be purchased as a traditional standalone policy or as part of a life insurance policy which guarantees a benefit at some point if the policy remains in force. It’s important to look at this coverage before the need arises or chronic illness makes securing coverage difficult or impossible.

You’re Insuring a Lifestyle

You’ve worked hard for all that you have. You want to leave a legacy for your family, not spend all you’ve earned on a nursing home or other care. Planning now for the future protects your assets and allows you the peace of mind that should you need the care, you’ll be able to get it.

All insurance policies are different. Be sure to review your insurance policy for specific information about coverages available to you. Nothing in this post is meant to suggest a guarantee of coverage.