Your Guide to Long-Term Care Insurance

Long-term care is quite different than traditional medical care. It is a skilled care/personal care service that people may need if they are unable to take care of themselves due to disability, illness or cognitive impairment such as Alzheimer’s disease.
Traditional medical care is aimed at trying to treat or cure illnesses. On the other hand, long-term care is provided to help an individual maintain his or her lifestyle; normally, it does not result in an improvement in the medical condition. Its sole purpose is to provide assistance with daily activities, such as washing, eating and moving around. It is also useful for those who need supervision and reminders to take medicine or protection.

Long-term care can be offered at your home or at a hospice, nursing home or adult day care center.

You can choose from the following types of long-term care services:

• Skilled care – This type of care is for individuals who have medical conditions that require professional help, such as a therapist or nurse. This is only provided in a nursing home or a care center.
• Personal care – Also referred to as custodial care, this type of care provides assistance with your routine activities. Personal care can be delivered at home or at a medical facility.

Costs Associated with Long-Term Care

Long-term care can be quite costly. The costs depend on the type and amount of care that you need, where you get it, and the type of professional who provides it. A reasonable estimate would be $3,000 per month for care in an assisted living center or more than $6,000 per month for care services provided in nursing homes.

Long-term insurance policies normally pay between $50 and $250 per day for care in nursing homes. How much coverage should you budget for? You can get in touch with local nursing home or health care agencies to  get an estimate of current costs. Don’t forget that costs will likely increase, so factor into your calculations the effects of inflation.

Unlike insurance premiums that depend on the number of years you have left to live, premiums for long-term care insurance depend on diseases or illnesses that you might have or might be at risk for, which may require long-term care without necessarily affecting your lifespan. For instance, a heart attack may not affect your premiums, but a degenerative condition might.

How to Pay for Long-Term Care

Long-term care can be paid for in a number of ways, including the following:

• Medicaid
• Long-term care insurance
• Long-term care riders on your life insurance annuity or policy
• Accelerated death benefits from your life insurance
• Personal savings, cash and other liquid assets.

Keep in mind that Medicare does NOT cover long-term care expenses if that’s the only care you need. It will cover care in a long-term care hospital (LTCH). These hospitals specialize in treating patients who may have more than one serious health condition, but who may improve with time and care, and return home.

To determine whether you might need long-term care, consider your risk factors, such as gender, life expectancy, family situation and family health history. Although it’s true that your risk of needing long-term care increases with age, keep in mind that many people, young and old, require long-term care due to injuries or accidents. Buying coverage when you’re relatively young and healthy, such as in your 50s, can result in lower premiums.