Unlike traditional health insurance provided through an employer or in the private insurance market, Long-Term Care (LTC) insurance covers health issues which result in long-term custodial care and services. This may be care received at home, in assisted living, or other healthcare facilities. It is a common misconception that Medicare or Medicare Supplement insurance will provide for this care, that is simply not true. They only provide for rehabilitation services, not custodial care.
These unique insurance policies reimburse the policyholder for services that assist the insured with activities of daily living. These activities of daily living (or ADLs) are eating, bathing, transferring, toileting, dressing, or cognitive issues such as dementia or Alzheimer’s. When applying for coverage, the applicant can select a range of benefits and options that will allow you access to services you need when you need them.
The Cost of Long-Term Care Insurance
The cost of long-term care insurance is based on the coverage you select and other underwriting factors:
- Your age when your policy was purchased
- The daily limit of coverage
- The maximum number of days (or years) that your policy will pay
- The lifetime limit of the policy
- Any optional benefits or riders
- Applicant’s current health and health history
Long-term care insurance was not designed for individuals who are already unhealthy and, in most cases, those applicants will be unable to purchase traditional coverage. There are, however, non-standard policies that a person already needing long-term care services may qualify for at higher rates.
The Need for Long-Term Care Insurance
The cost of custodial care can rapidly deplete one’s life savings, making long-term care insurance a strategic part of your financial plan. There is approximately a 70% chance you’ll need some type of extended care in your lifetime. For perspective, a home health aide costs approximately $20 per hour, assisted living costs about $3,000 per month, and a long-term care facility can cost $7,000 monthly.
LTC insurance provides the funds to offset these costs and delivers peace of mind. It gives you control and ensures you’ll have access to first-rate care when and where you need it. You will never have to be dependent on others or be a financial burden on your family.
Not Just for Seniors
Long-term care services are not exclusively for seniors, anyone who has been in an accident or suffers from a crippling illness may also need this form of care. In fact, 40% of people receiving extended care are under age 65.
Unless you are independently wealthy, Long Term Care insurance is vital to any financial plan. Let our LTC insurance professionals explain your options, and provide you with a comprehensive proposal.