For those fortunate enough to be already be aware of Long Term Care Insurance, what it covers and why it can be the most important, but overlooked, piece of any smart retirement plan, many are often confused by the jargon and multiple options in policies. A recent article on forbes.com attempts to demystify Long Term Care Insurance and reveal the basics that you need to know to make informed decisions and choose the policy that is right for you, your spouse and your family. Last month was Long Term Care Awareness month and thus many Americans became aware of this type of insurance, some for the first time, and went out seeking advice on purchasing a policy. But, Long Term Care Insurance needn't be complicated nor hard to understand. Here are the basics that you need to know before approaching a qualified agent.
What is long-term care?
Put simply, long-term care services refer to services that assist with the activities of daily living that are “non-medical” such as bathing, eating, getting in and out of bed and other essentials. These services are “non-medical” from the perspective of regular health insurance and Medicare/Medicaid and are thus not generally covered by those forms of coverage. Thus, many are left having to exhaust assets and pay out-of-pocket for these services, often at a time when they are least able to make complex decisions regarding their health and finances such as when illnesses like dementia or Alzheimer’s strike.
Will I need long-term care - what are my chances I can do without it?
According to a Department of Health & Human Services study, more than 70% of all Americans will need some form of long-term care after they pass age 65. Shockingly, other studies have shown that only 10% of Americans have long-term care coverage. The Forbes.com article points out, though, that Long Term Care Insurance is not just for the elderly. Christopher Reeve was literally Superman and needed more than 9 years of long-term care at age 42.
Okay, so I need Long Term Care Insurance - can I pay for it myself?
Not likely. Consider the average annual cost of these long-term care services:
- Nursing Home - $83,179
- Assisted Living Facility - $44,345
- Home Care - $38,317
Most of us can’t afford to pay these amounts out-of-pocket and must rely on Long Term Care coverage to assist with these costs. Otherwise, in order to qualify for Medicaid, you will need to spend down your assets and exhaust all you’ve worked for your whole life to achieve in order to care for yourself in these precious retirement years when when illness may strike and leave you unable to make difficult decisions about the care you’ll receive.
Okay, I’m convinced - so when is the best time to buy?
Well, as early as possible to lock in the best premium rates with the most coverage options. Definitely by the time you’re in your 50's and are still working and can afford the premiums and are healthy and can qualify for a good policy. As Forbes.com points out, a policy that is $2,000/year in your 50's can be $8,000/year in your 70s and many are simply declined coverage at any price after age 70 or 80.
I’m ready! Where can I purchase a policy and from whom?
You should only purchase a policy from a qualified insurer and professionals who understand the complexity of long-term care. At LTC Tree, we’ve helped thousands of Americans find a policy that is right for them. We’re the largest “virtual” or online Long Term Care Insurance brokerage and understand the options in policies and can assist you in making the right decisions for you and your family.
If you’ve done you’re research and are aware, generally, of what long-term care insurance is, when shopping for a plan, there are a number of other things to consider. Long-term care insurance plans can be complicated and often offer many options for level of coverage, type of coverage or care that is covered as well as payment options, among many other factors. But, we can help you navigate the many choices in Long Term Care Insurance plans. Simply fill out this form to get started. Thanks for reading today's blog. We really appreciate it.
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