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The Ins and Outs of Long-Term Care Insurance

Apr 30, 2018 by Comfort Keepers Denver

When it comes to planning for long-term care, there are a lot of moving parts. Where you’re going to live, what care you’ll need, and above all, what you can afford are all questions that will have to be answered, on top of researching different companies, institutions, etc…

Needless to say, it can be a lot to manage.

One component of long-term care that many forget about is long-term care insurance. It could make or break receiving the kind of care you want and need.

What is long-term care insurance?

Simply, this form of insurance covers any forms of care and expenses that aren’t covered by your current health plan or by Medicare. Depending on what plan you purchase, it could even help you pay for living in a nursing home, or having a caregiver in your own home.

This is great news, as the average cost for a private room in a nursing home costs almost $92,000 a year. Over 735,000 seniors live in some sort of assisted living facility, meaning billions of dollars are being spent every year on home healthcare.

This cost could be cut with long-term care insurance, and the decline has already begun with over 10 million Americans having purchased it.

What else is covered under long-term care insurance?

In addition to helping with nursing home/assisted living costs, this insurance can also help pay for home modifications you may need to make it more senior friendly, such as installing grab bars or ramps.

Interestingly, this insurance also covers future services that haven’t even been developed yet that may greatly aid you later on!

What’s the cost?

Your personal policy cost depends on what plan you purchase. This is all based off of both your budget and your needs.

This is a tricky game to play, as it involves predicting your future needs, but it will be cheaper to purchase it now than right when you need it.

You can fit your services to fit your budget. For example, you may opt to pay $50 for in-home care instead of $100 for nursing home care.

Who qualifies for it?

Anyone who needs help with two or more activities of daily living, or ADLs, is eligible.

These ADLs can be, for example:

  • Bathing
  • Dressing
  • Walking
  • Eating
  • Using the bathroom

It’s estimated that about 68% of those over 65 qualify for this insurance, under this definition.

However, it’s important to note that mental disorders and cognitive dysfunction actually disqualify you.

Who shouldn’t get it?

If you can afford all of the care you need, there’s no sense in getting this insurance. It’s mostly for those who need financial assistance or are trying to cut costs for their future care.

If I want it, when should I get it?

As mentioned above, the sooner you realize you need it, the cheaper it will be to purchase it then instead of wait.

However, do NOT purchase this insurance if you do not have all of your other insurance needs in place first. This includes Medicare, other health insurances, life insurance, and so forth.

Then, when all of that is settled and you anticipate needing care in the future, purchase long-term care insurance.

When do I begin receiving benefits?

Depending on where you live, you will have to wait out an “elimination period” before your benefits kick in. This is typically from the time you start to have difficulties with two or more ADLs, to a designated amount of days after that first day.

Be sure to take this period into account, as you will need to pay for any care you receive then, as the insurance has not kicked in yet.

If you think long-term insurance is something you’ll need, talk to your employer or insurance agent.

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