Are you thinking about whether you or a loved one will need long-term care in the future? It’s never too early to start planning. If you give enough thought to long-term care and LTC insurance now, you’ll be better equipped for any future changes—and you’ll have more potential to save money. Take a look at this overview of long-term care insurance to learn what it is, who may need it, and how it can benefit your family.
What is long-term care, exactly?
The phrase “long-term care” (LTC) encompasses a wide range of services. It involves providing healthcare and general assistance to those who need it, often coming in the form of in-home care, assisted living facilities, and nursing homes. While elderly people are the primary users of long-term care, people of any age can use it when they have a prolonged disability, illness, or cognitive impairment like Alzheimer’s. You or a loved one may require long-term care if a physician certifies that you need help performing at least two “activities of daily living” (ADLs), like eating and getting dressed.
What does LTC cost?
The cost of long-term care will vary depending on your area, but it can become very expensive. One financial group calculated that in 2016, the cost of a home health aide averaged $46,332 and a private nursing home room averaged $92,378 per year. Because long-term care is not considered a medical expense, many forms of health insurance—Medicare included—won’t cover it. With that in mind, you should give some very careful consideration to the purchase of long-term care insurance (LTCI).
Why should I get LTCI?
Generally speaking, you can forgo LTCI in three scenarios: either you have enough money to comfortably pay for your own care, you qualify for Medicaid, or you plan to make transfers out of your estate and need a LTC safety net. The latter can be difficult to plan for because you’ll need to meet a host of strict income and other eligibility requirements. When you’re thinking about LTCI, it’s normal to be concerned about the price tag. You might wonder, “Why should I pay all that money for something I don’t expect to use?” It’s hard to picture yourself or a loved one in a position where you can’t take care of yourself, but the reality can easily turn out to be different from what you imagined. The point of LTCI is to prepare for any eventuality and save money in the long run.
What are the benefits?
Do you really have a family member or close friend who lives nearby, has enough spare time, and wields enough expertise to care for you if you should ever need help? Even if you’re lucky enough to answer that question with a “yes,” you may need to plan for long-term care. It’s possible that you’ll need more expert care than even the most well-meaning loved one can provide. In fact, the probability that you’ll need long-term care at some point is much higher than the likelihood of getting into a car accident—yet knowing this probably wouldn’t make anyone cut back on auto insurance.
What does an LTCI policy look like?
If you choose to move forward with LTCI, you’ll need to do a lot of reading and shopping around. Find out the limits of how much or how long your policy will pay, and inquire about the company’s premium rate history to know whether they have a habit of raising premiums. The cost of your long-term care policy will differ based on a number of factors. These include the maximum amount your policy will pay per day; the maximum number of years it will pay; and the lifetime maximum amount it will pay. The cost will also change based on any optional benefits you select, as well as your age when you buy the policy. It’s better to buy LTCI early on for several reasons. For one, the price will be lower, and for another, you may not qualify for insurance if you are in poor health or you’re already using long-term care services.
There’s still a lot to learn about long-term care and LTC insurance; you should consider seeking guidance from a legal professional. The lawyers at Estate & Long Term Care Group can advise you on the best LTCI policies to suit your needs and assist you with the application process. Give us a call to start planning for the future.
Written by ELTC Law Group
