LONG-TERM CARE INSURANCE
Gains in life expectancy and rising health-care costs are prompting more Americans to consider long-term care insurance. Such insurance covers the cost of extended nursing care, either in an institution or in the home.
Statistics show about 40% of everyone who reaches age 65 will enter a nursing home at some time and that the average stay can be 2 1/2 years.
Paying for this care will require considerable resources, the average cost of a nursing home in Massachusetts is $200 per day or $73,000 per year.
That’s why planning ahead for long-term care makes sound financial sense.
Most elderly people, when asked by the American Association of Retires Persons how they would pay for long-term care, responded that Medicare would cover the cost.
Unfortunately, they were wrong.
Medicare does not cover long-term care. It pays for some nursing and home health-care expenses, but these must be medically related and short-term in nature.
Medicare supplemental insurance (Medigap) does not pay for long-term care.
And Medicaid, the welfare program that does cover long-term care, in a skilled nursing facility only requires recipients to “spend down” their assets to the poverty level before becoming eligible.
Nursing Home Insurance
At an average cost of $6,000 a month, nursing home care can be an enormous financial burden.
But private insurance can help. Most long term care policies cover the cost of skilled, intermediate, or custodial care. Almost all pay a fixed dollar amount per day. You select the benefit level you want, typically ranging from $125 to more than $200 per day, and the waiting period you desire. Premiums are based on your age when buying the policy and the benefits you choose.
At Home Care
Newer, more comprehensive long-term care policies will also pay the cost of care at home for people who might otherwise have to enter a nursing home. These policies cover at-home services ranging from dressing and bathing to housekeeping and shopping. And usually, no prior admission at a hospital or nursing home is required.
What to ask:
- How much are the daily benefits? For how long?
- When do benefits begin?
(Is there a waiting period during which you will have to cover costs?)
- What is covered, and are any conditions excluded?
Is there a prior hospitalization requirement?
- Are benefits sensitive to inflation? Will they rise as long-term-care costs increase, or do they remain level?
Will premiums remain level as you grow older?
- Are premiums waived while you are in a nursing home?
- Is the policy guaranteed renewable?
- If you decide to buy a policy, make sure to ask for the policy’s “outline of coverage”, which will summarize its benefits and limitations.
- It is also a good idea to make sure the policy provides a 30 day free-look period during which it can be returned for any reason and you will receive a premium refund.
Get More Information To determine if Long Term Care insurance should be a part of your overall insurance protection call us today!