Here are questions about long-term care insurance that you may have.
What’s the best age to start planning?
You will never be younger or healthier than you are today. That’s the reason to start planning now when you have the most options. The average age for new individual long-term care insurance applicants is 57; an age when many are able to qualify for good health discounts. This discount reduces costs and remains even if your health changes.
What are the odds I’ll need care?
Many people find it hard to see themselves needing hands-on assistance with basic living activities like bathing, getting dressed and eating. So they avoid thinking about it altogether. The U.S. government reports that 70% of people who reach age 65 will require long-term care services at some point in their lives.
We prefer to say that your real risk is either 0% or 100%. And, that the real question – and the bigger risk – relates to the length of time for which you may need to receive care services. Your plan must prepare for the risk of needing care that could last many years.
What does Medicare cover?
Medicare covers very little, if any, of the cost for long-term care and is restricted largely to specific illnesses and injuries and for short periods of time.
Medicaid is the joint Federal and state welfare program for those with low income and financial resources. Each state operates its own Medicaid program which ahs created major budgetary issues for many states. Other Federal programs, such as Veterans Affairs, do pay for some LTC services, but only for specific populations and in specific circumstances.
Why is it important for women to plan?
Long-term care is an issue of particular importance to women. Women are often impacted as providers of care for spouses and, ultimately, as recipients of care. Planning is especially important for women living alone (single, divorced or widowed).
Women tend to live longer than men and are far more likely to need long-term care. The majority of nursing home residents and those with Alzheimer’s disease are women.
Why buy something I might never use?
If you think about it, people hope to never file a claim on their homeowners, automobile, or life insurance policies. But that doesn’t stop people from owning coverage that protects against real risks. The same is true for long-term care insurance. The financial risks are too high and the potential burdens to loved ones are just too great to do nothing.
The two largest LTC insurance claims today each exceed $1 million. In 2010, the 10 largest LTC insurer paid over $10.8 million daily to 135,000 policyholders.
The families of claimants rarely talk about financial benefits. Instead they talk about how insurance allowed Mom to be care for at home… or how Dad was at a much nicer assisted living community located closer to the family.
There are also return-of-premium options and life insurance or annuities that provide benefits to those who are concerned about never needing care.
Can I get care in my own home?
Yes. Most long-term care insurance policies today enable you to receive qualifying care in your own home and that’s one of the key reasons to consider coverage. Most people with LTC insurance who start receiving care at home are able to remain at home, rather than needing to enter a skilled nursing facility.
How much coverage is the right amount?
That’s something to discuss with your insurance or financial professional, because there is no “one size fits all” solution. Your cost for insurance protection will be based on your age and health when you first apply, as well as how much coverage and what options your choose.
- Find out costs for care where you life or hope to retire.
- Be sure your coverage includes an inflation growth option so your pool of benefits increases each year.
- Ask about a “Shared Care” option that enables couples to link their policies in order to share benefits in the event one person’s benefits are exhausted.
