What Is Long-Term Care Insurance?Whether a business owner purchases it to offer a valuable employee benefit, or an individual uses it to protect an elderly parent, long-term care insurance (LTC) is coverage designed to help pay for extended medical and non-medical services that would otherwise be paid out-of-pocket. In 2007, 8 million Americans were protected with LTC, with $3.5 billion in long-term care claims paid, according to the American Association for Long-Term Care Insurance (AALTCI).While some LTC insurance plans cover nursing home care, other plans provide coverage for a range of services including care in an adult day care center, assisted living, and formal or informal in-home care. LTC insurance plans pay benefits to you and anyone else you designate, such as a spouse, parent, or child. Depending on the policy, it will either pay a fixed amount or reimburse you for services provided.Do I Need It?Similar to homeowners, health, and auto insurance, LTC insurance helps protect you, your loved ones, and your assets. When an elderly person falls ill and lacks insurance, the burden to pay for medical care often falls on family members – and that cost can be substantial.Considering the emotional struggles that result when a loved one requires this type of care, the last thing you’ll want to think about is a steep financial burden as well, and LTC insurance plans help you avoid this added stress.How Does It Differ From Disability Insurance and Health Insurance?Medical insurance and disability insurance do not protect you and your family in the same way that long-term care insurance does. In fact, health insurance plans typically cover only 30 days of recuperative time, whereas LTC insurance plans often cover two years or more.Although disability insurance replaces your salary in the event of an injury, it fails to cover ongoing medical care. Medicare is even more restrictive, reimbursing you on average only 28 days, with a maximum of 100 days.How Much Does It Cost?Premiums vary, depending on your age and health conditions when you purchase the policy, as well as the amount of coverage you desire. Although the cost of care in nursing homes and assisted living facilities varies from state to state, the average yearly cost of a nursing home in 2010 reached $80,850, according to Long Term Care Insurance Tree.This represents a significant expense for many families, so it’s best to be prepared. Purchasing LTC insurance at a younger age is a smart idea, considering that you are likely to be healthier and receive a lower premium. However, the AALTCI reported that only 33 percent of all Americans who apply for this type of insurance apply at the age of 55 or younger.Coping with a parent, spouse, or child’s illness is never easy, but long-term care insurance can help protect you and your family. Contact your independent insurance agent to find the best policy for your family’s specific needs.
Choosing the right long-term care insurance may be the most important retirement planning you do. You hope as with all the other types of insurance you purchase you will never need to use it. The difference with long-term care insurance is that there is a much greater chance of using it than your homeowners, auto or even a catastrophic health event. Statistics indicate that more than half of 65-year-olds today will need long-term care at some point in their lives. So, if you purchase a long-term care insurance policy, there’s a very good chance that someday you will use it.Let’s take a look at what long-term care insurance will do for you as well as your family. This type of insurance covers care for someone who needs help with basic tasks of daily living like bathing, dressing and eating. With long-term care insurance, this type of help can be provided in your home. Long-term care insurance is not just “nursing home” insurance as many people think. Most long-term care policies cover the costs of assisted-living facilities, home care, in addition to traditional nursing home care.Today, less than 15% of long-term care is in a nursing home. Having long-term care insurance is just what you need to keep you out of a nursing home so that you can receive care at home. Don’t most people want to stay in their own homes with their families as long as they can?Long-term care is expensive. According to MetLife’s Mature Market Institute, nursing home care runs an average of $213 a day or $77,745 a year, an assisted living facility is approximately $2969 a month , home health aides $20 a hour, homemaker/companions $18 an hour and adult day services $64 a day. The fact is that worse than needing long-term care is not being able to afford it.It is important to consider that you may not need long-term care for maybe 20-30 years. With this in mind you need to consider the rate of inflation and how much long-term care will cost at the time you will begin receiving care. In twenty years, $213 a day will be $564 a day. So you may have the funds to cover the expense today, but will you have enough to cover the cost of care twenty or thirty years from now.Long-term care insurance plans provide inflation protection which allows for the increased costs in the future. It is highly recommended that you include compound inflation protection in your plan unless you are purchasing a plan in your 70′s or older. Long-term care insurance seems expensive, but compared to what? You can easily save a great deal if you buy a policy while you’re younger and and in good health. If your health is poor, you may not qualify for long-term care insurance at any price.It is important to consult with a Long-Term care Specialist who is independent and shows no bias toward one company or another. He/she will be able to guide you to the company that will provide you the best coverage at the best rate. Don’t forget to ask for the discounts that you qualify for like marital or partner discount, preferred health and applying together as couple’s discount.