The nation’s population is aging at a faster rate than ever before. In fact, we are living longer than in the past. It is predicted that by 2034, seniors will outnumber children under the age of 18 for the first time in U.S. history, according to the Census Bureau projections.
Taking this into account, it is vital to understand the basics of long-term care insurance. The population of seniors will continuously grow, and more seniors will require long-term health services, whether in a nursing home or an assisted living facility. However, long-term care can be costly, especially if it is for a long period of time.
Additionally, many people mistakenly believe that their health insurance or the government will pay for their long-term care needs. But the truth is that traditional health insurance does not cover long-term care. And although Medicare does cover some long-term care, it is normally limited (paying for a maximum of 100 days), it is hard to qualify for and requires you to exhaust all your assets before being eligible (unless you use proactive planning).
To tackle the gap in healthcare coverage, long-term care was invented. Since this insurance is fairly new, we will answer some frequently asked questions about long-term care.
What is Long-term care?
Long-term care is a type of care or support you may need when you are no longer capable of handling daily activities on your own, such as getting dressed, eating, using the bathroom, etc.
In some cases, it may mean you have someone assisting you in your own home with getting ready in the morning or before bed. In other cases, long-term care may mean you are moved to a nursing home.
What are the different types of long-term care?
Long-term care normally falls into two types: personal care and skilled care. Personal care, more commonly known as custodial care, is for individuals who require assistance with non-medical activities. Such activities include the following:
- Dressing, grooming, bathing, eating, etc.
- Instrumental activities, such as grocery shopping, meal prepping, etc.
- Companionship
- Supervision
- Transportation
On the other hand, skilled care, also known as skilled nursing care, is for people who require skilled medical attention or rehabilitation services, including:
- Medical management
- Vital sign monitoring
- Wound care
- Mobility assistance
What is long-term care insurance?
Long-term care, which was originally known as “nursing home insurance”, is designed to pay off the expenses related to your long-term care, in the event that you are no longer able to handle your daily tasks.
These insurance policies are designed to cover the cost of both personal and skilled care services, regardless of where you choose to have them. Some of these long-term care insurances can even cover modifications to make your home more accessible.
How does it work?
Before your coverage kicks in, the majority of these policies require that you prove you have lost the ability to engage in at least 2 or 3 daily tasks (ADLs). Additionally, these policies have a deductible or “elimination period”, a set period of time that must elapse between the time you become eligible for benefits and the time your cover kicks in.
‘Elimination periods” are usually a 90-day period; sometimes it may be shorter and other times longer. In fact, some policies have no period at all. Nonetheless, the shorter the period of time, the more expensive it is. Long-term insurance normally offers a benefit period, best defined as the number of years of care the insurance will cover for.
When should I invest in long-term insurance?
It is important to understand the younger and healthier you are when you purchase a policy, the cheaper the cost will be. As a matter of fact, some policies deny your request, due to pre-existing conditions. Taking this into account, if you wait to become ill, it may be very difficult to find insurance.
According to the American Association for Long-Term Care Insurance (AALTCI), the best age to purchase your long-term insurance is before you reach your 50s. After your 50s, your health is unlikely to improve, so waiting longer will increase the insurance you pay for.
How do I purchase my long-term care?
Before purchasing long-term care insurance, you should speak with multiple insurance providers and compare the benefits, care options, and premiums offered. Ensure to find out the insurance company’s history of rate increases.
For the best help in purchasing your long-term care, consult with your lawyer, who has experience in elder law and can thoroughly review the terms and conditions of each policy and help you understand the best fit for you and your loved ones.
A Vital Element in Your Estate Plan:
Contact us today for assistance and support in finding the best long-term care insurance policy for your unique situation. Aside from life insurance, a long-term care policy is a key factor in your estate planning. When done correctly and carefully with the help of your estate planner, you guarantee your loved ones will be protected no matter the situation. Contact us today for your Legacy Session!
