Understanding Long-term Care:
Do you remember those 5,000-piece jigsaw puzzles you used to have when you were a kid? You know, the ones that took you forever to solve? In a way, finding easy-to-understand information about Long-term Care Insurance feels like a puzzle. It is often difficult for you to get the facts you need to make an informed decision.
What is Long-Term Care Insurance?
The word “long-term care” refers to the services received by people with chronic illnesses, disabilities, and injuries who need daily care for an indefinite amount of time.
Long-term Care Insurance is designed to cover the costs associated with these types of services, including most “activities of daily living” such as meal preparation, eating, bathing, walking, using the bathroom and getting dressed.
Covers the uncovered
Most people are unaware that many activities of daily living are considered “extended care,” and these costs will NOT be covered under your employer-based healthcare plan.
If you’re age 65 or over and eligible for Medicare or Medicaid, long-term care services are generally very limited and often require having to meet certain eligibility requirements to qualify for the limited benefits that they do offer.
Thankfully, Long-term Care Insurance can “fill the gap” for care services that are not covered by health insurance, Medicare, or Medicaid.
According to the U.S. Department of Health and Human Services, “Except for the specific circumstances described below, Medicare does not pay for most long-term care services or personal care— such as help with bathing or for supervision (often referred to as custodial care).”
Who needs it?
The AARP reports: ” By the time you reach 65, chances are about 50-50 that you’ll require paid long-term care (LTC) someday.”
And while it’s true that we often have more health-related issues as we age, Long-term Care Insurance isn’t just for the elderly. In fact, the U.S. Department of Health and Human Services reports: “3.6 million (37%) were under age 65.”
For example, if you were involved in an accident that required you to have continual assistance with basic everyday activities, would your spouse or partner be able to stay at home and take care of you?
How would you pay for these costs when your healthcare policy won’t?
Most people are unaware that many activities of daily living are considered “extended care,” and these costs may not be covered under your employer-based healthcare plan.
Don’t drain your savings
Expenses associated with long-term care can be very costly and can deplete a lifetime of savings within a few years. Long-term Care Insurance helps protect you financially by paying for services, such as in-home care, assisted living care, adult daycare, respite and hospice care, nursing home expenses and Alzheimer’s facilities.
Customized for you
Much like a life insurance policy – your age, health, and the benefits you select are all factors in how much you’ll pay for Long-term Care Insurance. By customizing your policy, you can meet your needs while controlling costs. For example, you can select the number of years that you want coverage (generally anywhere from two years and up), the dollar amount of coverage per day ($250, $350, etc.), and the percent of inflation protection you want.
Protects you from cost-of-living increases
Since healthcare costs are likely to increase over time, many Long-term Care policies also include built-in inflation protection to ensure that your benefits keep up with the costs associated with long-term care services when you need them.
Inflation protection is a critical part of Long-term Care Insurance because you may not need to file a claim until decades after purchasing your policy. So it’s quite possible that the $250 a day coverage you chose 10 years ago won’t be nearly enough to cover the cost of long-term care services at today’s prices.
Like most other types of insurance, Long-term Care Insurance cost is based on your age and health. For example, purchasing a policy when you are 50 years old will probably cost less than purchasing the same policy at 70 years old, so buy your policy when you are younger.
At Asurea, we take a simpler approach to getting the insurance you need. With access to over 40 insurance carriers, you’ll have a variety of plan options to choose from with the coverage you need at a price that works for you. Contact us today to learn more about Long-term Care Insurance and how it will protect you and your family financially in the future.
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This information is provided for general consumer educational purposes and is not intended to provide legal, tax or investment advice.
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