What is Long-Term Care Insurance?
Long term care insurance is one type of insurance coverage that is available to people who might potentially need long term care. However, there are many types of long term care insurance (or LTCi) that are available. LTC insurance covers, as a standard, the types of things that health insurance doesn’t, and it can also protect any assets you have. When you purchase a LTC insurance policy, you remove any burden from your children for having to provide care for your long term care. The polices typically cover things like nursing homes and adult day care but are also able to cover likes like home care and assisted living as well. If you have a LTC insurance policy, the benefits from it will kick in when you start to need help with activities in day-to-day living, or if you have a severe cognitive impairment.
You should know that everyone has the potential to need long-term care. We all get older, and a stroke, Alzheimer’s or even a fall can leave someone unable to properly care for themselves. If you are reading this and you’re over the age of 65, your chances of needing long-term care someday are around 68%.
However, keep in mind that it doesn’t just happen to older people, as 37% of people on long-term care are under age 65. If you require long-term care, chances are good that you’ll have to pay for it yourself, unless you’re legally impoverished, then government programs such as Medicaid might cover nursing home care.
Medicare and almost all other health insurance programs only cover LTC for a short period (normally less than 100 days) and even then, they usually only cover it partially. The bill for everything else comes straight to you.
And speaking of bills, long term care is quite expensive. Now, the average cost of a nursing home per year is over $70,000, but by 2030, it is estimated to climb to a whopping $190,600 per year!
Long term care can be a great alternative to having to pay for everything on your own, however, but it isn’t the right way to go for everyone, since each situation is unique. Those with severe health conditions may not be qualified to receive coverage, and if one is retired and has less than $70,000 in savings, he or she should probably rethink purchasing long-term care insurance.
As with any financial decision, however, it is best to consult with family or trusted friends, as well as a financial advisor to get answered any questions you might have. That way, you can be sure you’re making the best decision for yourself as well as for those you love.