Long Term Care

About long-term care insurance

Why people buy long-term care insurance
A long-term care insurance policy allows you to feel confident about your future and provided you with resources to help cover the cost of long-term care. The America’s Health Insurance Plans, 2007 National Survey, states the following reasons why people purchase long-term care insurance:

Minimize their financial exposure and take responsibility for protecting their assets.
Avoid being a burden on loved ones.
Enhance their choices and independence to receive care in the setting they prefer.

What is covered?
Long-term care insurance helps pay for care services when you need help with normal daily activities, such as eating, bathing, and moving around. Long-term care insurance also covers supervision due to a cognitive impairment such as Alzheimer’s disease. A long-term care insurance policy provides for different types of care in a variety of settings:

Skilled care– includes nursing care and physical, occupational, respiratory, and speech therapy from licensed professionals that may or may not be received on a daily basis.
Custodial care– is the most widely used type of care, and includes help with day to day activities such as eating and dressing.

How much coverage will you need?
When thinking about your coverage options, it is important to take the following into consideration:

Level of assets– you want to protect. Long-term care should be a factor in your overall retirement planning. Because needs, resources, and situations differ, our professionals will guide you through the different long-term care options and products to determine what is right for you.
Current cost of care– of where you live or plan to retire. Whether you plan to move to a warmer climate or closer to loved ones, the cost of care varies by state and by region. Where you wind up is an important factor in determining the amount of coverage you will need.
Length of time– research from the center for retirement research found that people need assistance for an average of three years. You will want to take into consideration your health and family history of illness that may require you to need care for a shorter or longer period of time.
Inflation protection– will help your benefits keep pace with the rising cost of care. Even the most proactive planners could come up short if they don’t account for inflation in estimating their long-term care needs.

What is Long Term Care?

Long-term care is the type of assistance people need to perform normal daily activities such as eating, bathing, dressing, and transferring. Long-term care needs typically arise as part of the normal aging process, but can also be due to an injury or illness.

Who needs long-term Care?

Where is long-term care provided?

The need for long-term care does not mean being confined to a nursing home. According to the U.S. Department of Health & Human Services, 80% of long-term care is provided at home. You can receive long-term care in a variety of settings, including:

Adult day care centers
Assisted living facilities
Nursing homes
Hospice facilities
Your own home

The cost of care

The cost of long-term care can be expensive depending on:

The type of care you need
How long you need it
Where care is received

The national average costs below are for one year of care. A study by the Center for Retirement Research found that in most cases, care is needed for three years while some individuals need care for much longer. When planning ahead, you will also want to take into account the rising cost of care, which on average has risen approximately 3.3% over the past six years.

In 2008 the national average cost of long-term care was:

Nursing Home ( Private Room)- $74,460/year
Nursing Home ( Semi-Private)- $66,795/year
Assisted Living Facility- $35,544/year
Home Health Care Aide-$19/hour
Adult Day Care- $62/day

In 30 years, long-term care is projected to cost over $250,000 per year.

Are you already covered?

Many people mistakenly believe their long-term care needs are already covered. However, long-term care assistance is not typically paid for by health or disability insurance. Government programs such as Medicare or Medicaid are not designed to cover long-term costs over long periods of time. How would you pay for care if the need arises?

Medicare– is the federal program providing hospital and medical insurance to people ages 65 and older, as well as to certain ill or disabled persons. In only certain situations are benefits available for home health care. Generally, Medicare may pay up to 100 days of care in a skilled nursing facility per benefits period- 100% for the first 20 days. From days 21-100 a co-payment is required.
Medicaid– coverage is primarily based on income and assets and in most states usually only covers care received in approved nursing homes. In states where Medicaid does cover home-based long-term care expenses it is done so on a limited basis.
Personal income and assets– including your home are often used to cover the cost of long-term care, which can have quite an effect on savings.
Family members– often assume the burden of care, which over time can have a significant impact on their lifestyle, personal and work commitment, and their physical and emotional well-being.
Long –term care insurance– allows you to feel confident about your future by providing you with the means today to maintain choice, control, and independence in your later years. It is a cost-effective way for you to take responsibility for your health and long-term care decisions. It will also help you secure your family’s future and your own quality of life by helping to protect your retirement savings.

Planning for long-term care

Long-term care insurance can help you secure your future and help protect the assets that you have worked so hard to save. Consider planning now for your long-term care needs if you want to:

Feel confident about your hard-earned investments and help protect your retirement savings and assets.
Be proactive and responsible for reducing the burden of care on family members.
Take control of your long-term care decisions and maintain independence and the ability to choose where you receive care.

Who needs protection?

Most families benefit from the protection that a long-term care insurance policy can buy. It is one of the most cost-effective ways to help you protect you and your family from the high cost of long-term care. It enables you to help secure your savings and your family’s future.

The right time to buy

When it comes to long-term care planning, there are two important reasons to address your future needs sooner rather then later:

The cost of long-term care insurance is primarily based on your age and health when you apply. Therefore, the younger and healthier you are, the more affordable your insurance policy will be.
The coverage a person buys for their future can also help protect them today. If an accident or illness were to occur when you were relatively young, owning a long-term care policy would ensure you have coverage to help pay for the cost of care.

The cost of waiting to buy

While many individuals recognize the value of long-term care insurance, many delay their purchase decision without realizing the potential risk associated with waiting. Premiums are directly related to your age and health. The younger you are when you purchase a policy, the lower your premium. Also, a change in your health can potentially make you ineligible for coverage. By being proactive in your 40’s and 50’s and purchasing long-term care insurance, you can help reduce the uncertainty of later years and maintain control over important care decisions, your assets, and your family’s future.