You standard and traditional long-term policy will usually cover the costs of long term care for a certain duration of time (typically six years).
Your level of coverage or coverage amount will tend to vary upon your geographic location. Most benefits comes in monthly allowance like $3,000 a month and include inflation protection. Your monthly allowance or benefits would grow with inflation.
There are different types of LTC insurance options. For example, for those worried they may never use the funds poured into their policies, there’s hybrid long- term care insurance. These hybrid policies combine long term care benefits with life insurance. The life insurance portion can later be paid out to beneficiaries if unused.
A survey conducted in 2018 found that up to 85% of 350,000 Americans with long-term care benefits, opted for the hybrid route. This product offers the best of bost worlds however, it is also costlier.
If you are worried about affording long-term care insurance, you should know that there are plenty of ways to help mitigate the costs.
You can customize your policy to design a cost that works best for you. This means altering your benefits, inflation, and riders.
Some coverage is better than no coverage. Ensuring that at least a portion of your needs are covered can help you afford the policy you need with a little more peace of mind.
In the event that you need the coverage, some of it will be there. It is important that you always pay your premiums otherwise you will lose your benefits.
Given that your funds qualify, Medicaid may be a route for those unable to afford coverage.
With Medicaid however, you will have to make sure you have depleted assets before qualifying. Additionally, working with an attorney or financial advisor can help you protect your assets. Medicaid will conduct a five year look back which will analyze your assets and finances. You can also be penalized for any gits allotted during that five year period.
If you feel uneasy about obtaining a policy you may never use, rising premiums, or insurers, you will want to save on your own. In fact, you will need to save on your own in the case that you wish to go uninsured, and you will want to save a lot.
The cost of care will vary depending on a number of factors including, location, years of care, and level of care. The years of care will vary by individuals however, on average you can expect at least five months of care. It is also important to note that on average women tend to outlive mean and thus require longer durations of long-term care as well.
What is LTC?
You may think that your health insurance will cover all of your medical expenses including those accrued in your older years. This is not usually the case. Aging can come with many new types of care, including long-term care. Long-term care is not covered by regular health insurance.
Long- term care insurance can help cover the costs of a nursing home as well as other kinds of specialized care senior may need.
Long-term care insurance covers the costs associated with care for chronic illnesses in old age, at home care, nursing home costs, and or memory care. LTC insurance can also help cover other costs associated with help for daily activities.
It will not cover the cost of prescriptions, routine doctor visits, or surgeries as those fall under medical care.
Medicare is health insurance given to all Americans who fall in the 65 or older range. Medicare differs from long term care and it will not cover long-term care costs. Medicaid is health insurance offered to lower income American who qualify. Medicaid can help cover long-term care costs however you must be below a certain income level to even qualify.
Some have considered depleting their assets when the need for long-term care arises in order to qualify for medicaid however, it is not that simple. Medicaid will conduct a five year look back period and will carefully review any assets you “gifted” or depleted the past five years.
Nursing homes costs can vary greatly. The nationwide average sits above $200 per day however, you can easily run into $400 a day depending on location. With these figures you are looking at up to $75,000 – $150,000 a year. You must also consider how long your potential stay will be and multiply by that number.
Long-term care insurance may be ideal for those who have adequate savings they wish to protect. Couples and those who are purchasing long-term care together can also benefit from discounts. Both spouses can become insured at only slightly more cost than if one were applying for an individual policy.
Opt for coverage
Long-term care costs are constantly rising. Additionally, knowing whether or not you will need care is impossible. According to AARP, 70% of individuals 65 or older will need long-term care.
If your finances are unpredictable or complicated it may be best to consult with a financial advisor. Given that your financial situation is accounted for but you have long-term care questions you should work with a trusted agent. Any step at all towards planning for your future long-term care is a step in the right direction.
Planning for you future long-term care now, can make all the difference in the years to come. You will want to be prepared for the unexpected and not have to worry as much. Long-term care insurance can also help protect your assets.
Aside from your assets, long-term care insurance can help alleviate the burden form your family and a hybrid plan can help you leave behind your assets to them. If you have been curious about how to plan for your future-long term care, it may be time to start up that conversation. Talk to your family, friends, or a trusted advisor to learn as much as you can about the subject.
Familiarize yourself with which programs and options may or may not be available to you.When it comes down to analyzing the costs don’t assume, but instead look at real life numbers. The costs for this type of care is constantly rising. You will want to have some sort of idea of what costs you may be facing and also have a plan in place to account for those costs. Long-term care insurance may be the best option for you whereas, medicaid may be an option for others. Some individuals may prefer a hybrid policy over traditional long-term care insurance.
Having long-term care on your radar is the first step. Some related topics to consider are:
- Types of care
- Family History
- Your health
If you or someone you love is interested in Long Term Care or Long Term Care Insurance be sure to visit: LTC TREE for more information.