Long term care insurance
The cost of certain long term care services are often not covered by traditional forms of health insurance or Medicare. This is why you may require Long Term Care Insurance. This will allow you to cover the costs of services required at home to help you deal with the activities of daily living. These benefits can also be used in conjunction with care needed at a whole host of community or facility based setting, e.g. a nursing home.
The choice of long term care insurance policies is wide and varied. So it is always best to find a suitable plan that will fit around your own individual circumstances. The cost of this type of insurance policy is based on your age, the benefits you require to be covered and any additional optional benefits you choose. If you are currently already receiving long term care services and consider yourself to be in poor health, you may find that you don’t qualify for this insurance, or your premiums may be adjusted up accordingly.
A long term care insurance policy will either cover you for a specified period of time or for a set amount of dollars that will be paid out in the form of benefits. Should you choose the option of time, the most common periods are 2, 3, 4 or 5 years, although you do have the opportunity to apply for unlimited or lifetime coverage. The majority of companies will actually make a monetary based calculation and inform you of the total amount of dollars benefit your policy is worth, rather than sticking to a set period of time. Many policies have a lifetime benefit of up to $1 million.
Typically you select an amount of daily benefit you would like to receive. This is usually somewhere in between $50 – $500. However, many modern day policies will specify benefits on a monthly, rather than daily, basis. This is to allow you more flexibility. On the days that family care is available, as opposed to outside help, it should cost you far less. So you can actually choose to have the same amount of benefit paid each day, or as many people do, only have 50% of the benefit paid on days you are receiving care from your family and the whole amount when nursing home care is required.
If you have chosen to not go with an unlimited or lifetime policy, you should choose a Maximum Lifetime Benefit. An example would be if you took a $200 per day policy for 3 years, your maximum lifetime benefit would equate to approximately $219,000. You then need to make the decision as to what type of coverage you prefer. You may choose to receive benefit for facility care only or you could, of course, choose a comprehensive benefit that covers all eventualities.
It must be said that the majority of policies nowadays are comprehensive coverage, although this does not stop people from still purchasing a facility care only policy. Should you purchase a facility care only policy, this will still cover you for aid in a nursing home or an assisted living facility. However, no benefit will be provided when you are being cared for by friends or family.
You can choose to customize your policy by adding insurance “riders”. The most popular rider is Inflation Protection. I’m sure you’ll agree that $1 million dollars is worth a lot less nowadays than it was 50 years ago. So by taking the Inflation Protection rider, you can minimize the effects of the rising cost of care. If you choose to take this option, it will be reflected in your initial starting premium.
Not only do long term care insurance policies cover the cost of care, they can also cover the cost of additional home services, equipment or devices that may be needed. You may require home monitoring electronic systems, perhaps your home needs to be modified with ramps or grab bars. This will also cover your transportation to and from medical appointments and facilities. You can even cover the costs of training a relative to provide the personal care and attention you need.
There are many reasons for you to consider investing into a long term care insurance policy. We are now living far longer than we ever did before, the costs of care in a nursing home can easily exceed $50,000 a year and I am sure you don’t wish to be a financial burden to your family or watch your hard earned savings disappear overnight.
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