What is Long Term Care Insurance?

Long Term Care Insurance pays for care a person receives either at home or in a facility when he or she needs help with activities of daily living (eating, bathing, dressing, toileting, transferring, and maintaining continence) due to an accident such as a fall, illness such as Alzheimer's, or just normative old age.  The major Long Term Care Insurance companies are Genworth Financial, John Hancock, MetLife, Prudential, Mass Mutual, New York Life, and Penn Treaty Network America.

It is important to remember that Long Term Care is not limited to the elderly.  Accidents and unexpected illnesses can happen at any time, and fate does not take one's age into account.  Many people underestimate the risk of needing Long Term Care at an earlier age.  Financial advisers commonly advise their younger clients to consider Long Term Care Insurance.  The benefit is that younger applicants get significantly lower premiums.

If you needed Long Term Care tomorrow, consider the following important questions:

• Who would provide it?
• Where would you receive it?
• How would you pay for it?

How much does Long Term Care cost?

National nursing home care costs average between $40,000 and $100,000 per year, depending on location and level of care. Home health care costs vary depending on the type and amount of care required. For most people, either of these expenses would severely threaten their financial security and independence.

Who pays for the Long Term Care bills? 

You do because...

• Many people mistakenly believe that their health insurance or Medicare will pay for Long Term Care. Currently, this is not the case;  therefore, a Long Term Care Insurance policy might be an option for your financial plan.

• Health insurance is designed to pay expenses for medical costs such as doctor's visits, tests, medicines, surgery, or other specific services. Health insurance will not pay the extra cost of Long Term Care.

• Government programs such as Medicare, at present, are restricted or limited to only twenty days of nursing home care. Medicare, for instance, is designed to provide health insurance for people over age 65 and pays only 4% of Long Term Care costs annually.

• Medicaid, which is the government welfare program, pays approximately 45% of the total spent on Long Term Care.  Individuals or their families typically carry the burden of Long Term Care expenses.  In fact, consumers and their family members pay 41% of the nation’s Long Term Care costs.  Unfortunately, most individuals will deplete their assets to poverty level before qualifying for Medicaid.

When should I apply for Long Term Care Insurance?

Because individuals may be denied coverage due to poor health and because rates vary with age, it is beneficial to apply for Long Term Care Insurance while you are young and healthy.

Long Term Care Insurance is offered in a different fashion than group health and other insurance products. Individuals deal directly with an insurer through a broker or insurance agent.  The brokers (such as LTCtree.com) work for multiple carriers and are more objective than agents who work for just one company.

Long Term Care Insurance cannot prevent you from ever needing Long Term Care services, but it can help protect you and your family from financial burden or depleting your assets.  Our Long Term Care School 101 class will help guide you through the maze of Long Term Care information, and it will help you make the choices that are best for you and your family.