Long-term Care Insurance

What is Long-term Care Insurance?

You may notice your parent is getting older and may eventually need extra care or services, but the question that is keeping you up at night is: how will you pay for it? Long-term insurance is one way to help you cover the costs. ACL states long-term care insurance covers a host of long-term services and supports that are not included in regular health insurance. This involves personal and custodial care, such as assistance with routine daily activities: bathing, dressing, getting out of bed, etc. Most policies will cover care in a variety of settings including your own home, a nursing home, an assisted living facility, and an adult daycare center. Long-term insurance also helps cover those with a chronic health condition, disability, or disorder such as Alzheimer’s. However, your loved one is not eligible for long-term insurance if they already have poor health or are receiving long-term care. Don’t wait until your loved one needs healthcare insurance to buy it, most get it in their mid-50’s and 60’s. Whether long-term care seems like the right option for your elderly family member depends on their situation and preferences. There are several factors to consider before buying long-term care insurance.

Why buy Long-term Care Insurance?

You may wonder why to bother buying insurance if you are not sure if your loved one will need it. However, nearly 70% of 65-year-old people will need long-term care services or support, according to 2020 data from the Administration for Community Living, part of the U.S. Department of Health and Human Services. It is better to be safe than sorry because if you don’t have insurance to cover long-term care, you will have to pay for it yourself. Regular health insurance does not cover long-term care and neither does Medicare. According to NerdWallet, Medicare only covers short nursing home stays or limited amounts of home health care only when you require rehab or skilled nursing. It does not cover the costs of custodial and personal care, such as helping with day-to-day tasks.

NerdWallet states people buy long term healthcare for two reasons:

1. Protect their savings

   Long-term care can use up your loved one’s retirement fund quickly. According to Genworth’s 2020 Cost of Care Survey, the median cost of care in a semiprivate room is $93,072 a year. Medicaid helps ensure those with low incomes, however, you could only use this federal health insurance program after you exhausted most of your savings.

2. Give more options for care

   Long-term care insurance allows you to afford higher quality care. Through using Medicaid, your options are limited since they do not cover assisted living in most states and can only cover nursing homes that accept payment from the government program.

How Long-term Care Insurance works

You can buy long-term care insurance directly through an insurance company. You can also check if it is offered through your job, some employers offer the opportunity to purchase care from their brokers at group rates. You should get several quotes from different companies to compare prices before settling on an insurance policy.

Costs depend on a variety of factors. Nerdwallet states the following effect the rate of your policy:

• Your age and health: The older you are, the more likely you are to have health problems, so you will have to pay more when you buy a policy.
• Gender: Women usually have to pay more versus men since they live longer and have a higher chance of making long-term insurance claims.
• Marital status: Married people pay less for premiums.
• Amount of coverage: there are different types of coverage for different rates you choose to buy.
• Insurance company: Prices vary depending on the insurance company, which is why it’s a good idea to compare rates.

Your loved one will have to fill out an application and answer health questions to buy long-term insurance. Once you’re approved for coverage and the policy is issued, you start paying premiums. You can choose the amount of coverage you want, but the policies usually have a cap amount.

Under most policies, your loved one can receive benefits if they can’t do at least two out of six “activities of daily living” which include: bathing, caring for incontinence, dressing, eating, toileting (getting on or off the toilet), and transferring (getting in or out of a bed or a chair). They can also receive benefits if they are suffering from cognitive impairment such as dementia.

When your loved one needs care and wants to make a claim, the insurance company will review medical documents from your doctor and may send a nurse to do an evaluation. Under most policies, you will have to pay out of your pocket for long-term care services for a certain amount of time called “the elimination period.” The policy starts reimbursing you once you’re eligible for benefits and usually after you pay for that certain period.

Whether you think long-term insurance is the right choice to make for your loved one, don’t wait till the last minute to decide. Don’t risk having them having to pay from their life savings, and start looking at which insurance policy works for you and your elderly family member. You will thank us later.

1 +1 Cares is a referral agency that works for clients and caregivers. We match caregivers with clients and inform them of your requirements. We work for you so you and your loved one can have a safe, enjoyable caregiving experience.