Why Buy Long-Term Care Insurance?

Category: Homecare Services | Posted On: October 9, 2017

Although there is no guarantee that you might need Long-Term Care, statistics indicate that seven in ten people who live to age 65 will need these services at some point in their lives. Your Financial Advisor can help evaluate your need for Long-Term Care (or LTC) insurance and help select a policy to suit your needs. What is LTC insurance? LTC insurance is coverage you can purchase to help pay for assistance if you can no longer care for yourself. It offers protection for your nest egg against the high costs of extended health care if you become physically impaired, usually due to chronic illness or a degenerative condition. In exchange for your premium, most policies pay a fixed dollar amount for care you receive in a variety of settings, including your home. What should I look for in LTC insurance policies? Consider providers that are A-rated and have been in the long-term care insurance business for 10 years or more. Companies such as A.M. Best, Standard & Poor’s (S&P), Moody’s Investors Service and Fitch Ratings evaluate providers based on their claims paying ability, history of raising premiums, financial statements, investment records, customer satisfaction and more. When is a good time to buy LTC insurance? The day you need long-term care may seem far-off, but unfortunately, 40% of Americans receiving long-term care are under the age of 65.* Remember — accidents or illness can also lead to the need for long-term care. In answering this question, you must also keep in mind that your health determines whether you qualify for LTC insurance and is considered when your premium is calculated. The premium amount also factors in your age at the time you take out a policy. Do Medicare or Medicaid cover long-term care? Probably not. Medicare funding is restricted to medically necessary, acute, skilled care — such as the care you would receive at a hospital or skilled nursing facility. Benefits are generally limited to 100 days. LTC insurance benefits, on the other hand, are intended for the help you need performing the activities of daily living if you have a chronic condition. It is the kind of care you may receive in a nursing home, assisted-living facility or your own home. Medicaid can cover some long-term care needs, but programs and eligibility vary from state to state. Your ability to choose the type of care you receive may be compromised when you rely on Medicaid — it may not cover care received in your home, and not all facilities accept it. And if you have built a nest egg, you probably won’t qualify for Medicaid; in general, you must have $2,000 or less in savings and other assets. Can LTC insurance pay for in-home care?You probably think of long-term care insurance as a way to preserve your lifestyle from the high costs of nursing-home care. But today, LTC policies offer benefits for the care you receive at home as well as in a nursing home, assisted-living facility or adult day-care center. With LTC insurance, you can:-Receive care in the comfort of your home-Choose your caregiver-Minimize disruption to your lifestyle-Remain more independent. What are activities of daily living?

Depending on the policy you choose, LTC insurance can provide benefits for the care you receive in almost any setting, whether it be a nursing home, your own home, an assisted-living facility or adult day care. Typically, to qualify for benefits you must be unable to perform two of the six activities of daily living (ADLs). You may also qualify for benefits if you suffer from cognitive impairments, such as Alzheimer’s disease. ADLs include:-Bathing-Continence-Dressing-Eating-Transferring (the ability to move in and out of a bed, chair, or wheelchair)-Toileting*“Guide to Long-Term Care Insurance,” America’s Health Insurance Plans, 2007.