Guide to Long Term Insurance (“LTC”)
Advances are being made in medicine, and people are living longer than ever before. This longer life expectancy increases the likelihood that long-term care will be required. Today, more than ever, LTC Insurance is a key component of any financial plan.
Accordingly to the U.S. Department of Health and Human Services, 70 % of people who reach age 65 will require long-term care services at some point in their lives. In comparison to this, only 70 out of 1000 Americans will have an automobile accident serious enough to warrant filing a claim and only 5 out of 1000 Americans will suffer a catastrophic loss of their home due to fire.
What is long term care insurance?
Long-term care covers a wide range of services but generally falls into two categories:
Skilled Care and Personal Care– skilled care is provided when recovering from an illness or injury and personal care helps maintain the activities and functions of daily life. The activities of daily life are eating, toileting, transferring, bathing, dressing and continence. Long-term care is usually not medical care and generally does not require a doctor or nurse. It is providing individuals with assistance in daily living, such as bathing and dressing. Long-term care can also include speech or occupational therapy, outfitting a bathroom with grab bars, or even light housekeeping or preparing meals.
Why people buy long term care insurance!
To have choices
Nothing makes us feel more vulnerable than losing control of basic choices. Having the ability to choose the type of care that best serves an individual’s needs is as important as having the ability to pay for that care. LTC Insurance can help provide the ability.
To protect family and friends
Family is usually the first place people turn for care, comfort, and support. But in most cases, they are not professional caregivers. Weeks, months or years of care , even with just basic daily needs, places a large burden on a family’s shoulders. LTC insurance provides services so that family members can give support in more meaningful ways.
To stay at home
Most people prefer to stay in their own home or where they’re most comfortable. LTC insurance helps with many different types of care and services which may enable individuals to stay in their own homes.
To protect savings and assets
No one puts away money in hopes of one day using it to pay for long term care. However, just as there is the possibility of being hospitalized or having a car accident, there is a possibility of needing long-term care. Since LTC Insurance helps pay for care, it also helps protect hard earned savings and assets
Why others wished they had LTC insurance!
- Medicare – before medicare can help with nursing home expenses, a hospital stay of at least 3 days is required. Then, medicare will cover a portion of expenses for skilled care in a skilled nursing home facility only.
- Medicaid – intended for people without sufficient income or means to provide for themselves, Medicaid provides help only after most personal savings have been depleted. In acts largely as a safety net when there are no options.
- To be able to afford care – With the average length of long term care services lasting nearly three years, the costs can quickly add-up. Savings may pay for sine expense, however these assets are probably earmarked for other things. In addition, long term care may be needed before enough money has been accumulated.
- To avoid of becoming a burden – While family members may want to do all they can to help, caring for a family member has many adverse financial and emotional consequences, that may place a serious strain on the family.
How much does long-term care cost
The cost for services can vary greatly, depending on what type of care you need and where you receive it. But, two things are certain; (1) long-term care services can be expensive, and ( 2) relying on family or friends may not always be the answer.
The national average annual cost of a private room in a nursing home is over $ 79,000.- or over $ 217 per day . In may parts of the country, the costs are much greater. Home care, although generally less expensive than nursing home care, can still be very costly- especially if round- the- clock care is required.
When a member of the family provides informal care at home, the costs are harder to determine. The caregiver may have to give up work either temporarily or permanently. It is also impossible to put a price tag on the emotional stress the caregiver may experience.
Isn’t long-term care covered by Health Insurance
Many people mistakenly believe that some other program already covers them. The fact is, since long-term care is not considered medical care, health insurance will not cover the costs.