Long Term Care Insurance

According to the U.S. Department of Health and Human Services, long-term care insurance specifically covers the costs of long-term care services, most of which are not covered by traditional health insurance or Medicare. These include services in your home such as assistance with activities of daily living (dressing, bathing, feeding, transferring, continence and ambulation,) as well as care in a variety of facility and community settings.

Seventy percent of people over age 65 will eventually need long term care. Long term care insurance policy coverage generally provides $50 a day to $300 a day for personal care. Some policies are based on daily dollar amounts, others on a monthly amount. Having long term care insurance is a good way to provide for your care without having to use your resources in reserve.

Contemplating Long Term Care

When contemplating a long term care insurance policy, consider the following:

1. The younger and healthier you are, the better the premium rates will be (and the more insurable you will be.) Thus, it is generally more financially advantageous to start your research at an earlier age. Often people will wait, thinking that this type of insurance is something to look into in one’s elder years. However, often by that time, health and medical conditions have started to appear, making the recipient less insurable and pushing the premium rates higher. Certain health conditions can even cause you to be totally declined.

2. The decision to purchase, or not purchase, long term care insurance can be considered in light of one’s personal financial condition. Some may have sufficient assets and are confident they can “self insure” in the event of a catastrophic long term health care situation. Others may not have the level of personal wealth to sustain them, and would benefit from paying for the security of long term care insurance.

3. Locate an agent or broker who is well-versed in long term care insurance, and licensed and insured in this area. Friends and family members, elder law attorneys, or financial professionals are good sources for referrals.

Key Topics of Discussion

When comparing policies with your agent, here are a few key topics for discussion:

The elimination period, typically a 30- or 60-day period. The elimination period is the amount of time at the beginning of your care that you will be required to pay for. After the elimination period, the policy will then take effect and start covering your expenses. Typically, the longer the elimination period, the lower the premium cost.
Consider an insurance adjustment rider for inflation. Having this as part of your policy plan allows your coverage to rise with inflation. This type of benefit to a plan will add extra cost to the premium, but can have a very advantageous end result.
Having a life-time benefit can be more costly, so consider if it is right for you. Three to five years tends to be the average time that most people need long term care assistance. When choosing a policy, select a company that is highly rated. The company “A. M. Best” often gives ratings to insurers.

For information about long term care insurance, go to CareFamily.com.