What is Long Term Care Insurance?Long-term care insurance (LTC or LTCI), an insurance product that helps provide for the cost of long term care beyond a predetermined period. Long-term care insurance covers care generally not covered by health insurance, Medicare, or Medicaid.
Individuals who require long-term care are generally not sick in the traditional sense, but instead, are unable to perform the basic activities of daily living (ADLs) such as dressing, bathing, eating, toileting, continence, transferring (getting in and out of a bed or chair), and walking. The Benefits of Long Term Care InsuranceLong-term care insurance generally covers home care, assisted living, adult daycare, respite care, hospice care, nursing home and Alzheimer's facilities. If home care coverage is purchased, long-term care insurance can pay for home care, often from the first day it is needed. It will pay for a visiting or live-in caregiver, companion, housekeeper, therapist or private duty nurse up to seven days a week, 24 hours a day (up to the policy benefit maximum).
Other benefits of long-term care insurance:
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How to Plan and Pay for Long-Term Care
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The U.S. Department of Health and Human Services suggests that 70 percent of adults age 65 and older will need some kind of long-term care. But researching and planning for long-term care — and strategizing how to pay for it — is a daunting task. Here’s how to get started.
Planning For Long-Term Care Needs Start by educating yourself and reviewing assisted living, home health services, independent living, hospice, and adult day/foster care to learn what services each provides. Explore the long-term care options in your area. Consult state agencies or state affiliates of the National Center for Assisted Living. Search for skilled nursing centers and home health agencies online by zip code, city, and state. |
This resource from Nolo.com provides useful tips on how to assess your potential need for long-term care. If you have long-term health issues, hereditary illnesses, or conditions that might impact your ability to live independently, are there lifestyle changes you could make to reduce or eliminate the risk of onset illnesses? Could you potentially age in place, with modifications to your home? Or, are you worried about cognitive impairments like Alzheimer’s disease or dementia that will require you to move to a facility?
The U.S. Department of Health and Human Services suggests that 70 percent of adults age 65 and older will need some kind of long-term care. But researching and planning for long-term care — and strategizing how to pay for it — is a daunting task. Here’s how to get started.
Planning For Long-Term Care Needs
Start by educating yourself and reviewing assisted living, home health services, independent living, hospice, and adult day/foster care to learn what services each provides. Explore the long-term care options in your area. Consult state agencies or state affiliates of the National Center for Assisted Living. Search for skilled nursing centers and home health agencies online by zip code, city, and state.
This resource from Nolo.com provides useful tips on how to assess your potential need for long-term care. If you have long-term health issues, hereditary illnesses, or conditions that might impact your ability to live independently, are there lifestyle changes you could make to reduce or eliminate the risk of onset illnesses? Could you potentially age in place, with modifications to your home? Or, are you worried about cognitive impairments like Alzheimer’s disease or dementia that will require you to move to a facility?
Talk to your relatives about your plan and clearly communicate your wishes — whether in a durable medical power of attorney or other legal documents — to prevent questions, confusion, or disagreements if you’re unable to make your own medical decisions. Begin to plan for the cost of care, which varies greatly by state, and the services you need. Medicare won’t cover custodial care. However, Medicaid does, but programs and eligibility also vary by state.
Paying for Long-Term Care
Long-term care is an expensive proposition. According to a 2015 study published by the U.S. Department of Health and Human Services, long-term care costs approximately $70,000 for about two years, which is the average time people require.
If you’re still working, ask whether your company offers savings or insurance programs in which you can invest now to save for future long-term care costs. Increase your contributions to your individual or employer-sponsored retirement plan. You’ll grow your savings while taking advantage of the tax benefits. Meet with a financial advisor to discuss your options.
Of course, there are other ways to finance long-term care.
Insure yourself with long-term care insurance (LTCI), which covers healthcare, admission to nursing homes, adult day care, and personal care for those over age 65. LTCI policies are complex and include annual premiums that gradually increase over time. Comparison shop, buy early, and choose a policy that covers as many aspects of long-term care as possible.
Examine your current insurance policy to see whether it covers long-term care. Add a rider — especially if you can afford long-term insurance but don’t qualify. Many companies have tightened their eligibility to exclude people with multiple health conditions like cognitive impairments, orthopedic issues, and diabetes.
Open a health savings account (HSA) if you don’t have one and you’re still working. HSA money rolls over year-over-year; there’s no tax when you withdraw funds to pay for qualified healthcare expenses — including long-term care and long-term care insurance premiums. In 2018, you can deposit up to $3,450 in tax-deductible contributions. If you have a family insurance plan, you can up your contribution to $6,850; if you’re over 55, contribute an additional $1,000.
Veterans can take advantage of veteran benefits from the Veterans Affairs Aid and Attendance (A&A benefit) to pay for care. After you receive your veterans pension, apply for this benefit in writing at your Pension Management Center.
Also, talk to an accountant and a real estate professional to see if selling your home is a viable option for helping to cover the cost of long-term care, given the current average home listing prices. In Matthews, North Carolina, for example, homes typically sell for about $307,000.
It’s Never Too Early to Start Planning
An unexpected life-changing event can devastate someone’s golden years. Without proper planning, a sudden need for long-term care can cause tremendous financial stress in an older person’s life. You can’t predict if you’ll need long-term care, but planning for the possibility will give you and your loved ones’ peace of mind — and that’s priceless.
Author
June is the co-creator of Rise Up for Caregivers, which offers support for family members and friends who have taken on the responsibility of caring for their loved ones. She is author of the upcoming book, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers.
Photo Credit: Pexels.com
The U.S. Department of Health and Human Services suggests that 70 percent of adults age 65 and older will need some kind of long-term care. But researching and planning for long-term care — and strategizing how to pay for it — is a daunting task. Here’s how to get started.
Planning For Long-Term Care Needs
Start by educating yourself and reviewing assisted living, home health services, independent living, hospice, and adult day/foster care to learn what services each provides. Explore the long-term care options in your area. Consult state agencies or state affiliates of the National Center for Assisted Living. Search for skilled nursing centers and home health agencies online by zip code, city, and state.
This resource from Nolo.com provides useful tips on how to assess your potential need for long-term care. If you have long-term health issues, hereditary illnesses, or conditions that might impact your ability to live independently, are there lifestyle changes you could make to reduce or eliminate the risk of onset illnesses? Could you potentially age in place, with modifications to your home? Or, are you worried about cognitive impairments like Alzheimer’s disease or dementia that will require you to move to a facility?
Talk to your relatives about your plan and clearly communicate your wishes — whether in a durable medical power of attorney or other legal documents — to prevent questions, confusion, or disagreements if you’re unable to make your own medical decisions. Begin to plan for the cost of care, which varies greatly by state, and the services you need. Medicare won’t cover custodial care. However, Medicaid does, but programs and eligibility also vary by state.
Paying for Long-Term Care
Long-term care is an expensive proposition. According to a 2015 study published by the U.S. Department of Health and Human Services, long-term care costs approximately $70,000 for about two years, which is the average time people require.
If you’re still working, ask whether your company offers savings or insurance programs in which you can invest now to save for future long-term care costs. Increase your contributions to your individual or employer-sponsored retirement plan. You’ll grow your savings while taking advantage of the tax benefits. Meet with a financial advisor to discuss your options.
Of course, there are other ways to finance long-term care.
Insure yourself with long-term care insurance (LTCI), which covers healthcare, admission to nursing homes, adult day care, and personal care for those over age 65. LTCI policies are complex and include annual premiums that gradually increase over time. Comparison shop, buy early, and choose a policy that covers as many aspects of long-term care as possible.
Examine your current insurance policy to see whether it covers long-term care. Add a rider — especially if you can afford long-term insurance but don’t qualify. Many companies have tightened their eligibility to exclude people with multiple health conditions like cognitive impairments, orthopedic issues, and diabetes.
Open a health savings account (HSA) if you don’t have one and you’re still working. HSA money rolls over year-over-year; there’s no tax when you withdraw funds to pay for qualified healthcare expenses — including long-term care and long-term care insurance premiums. In 2018, you can deposit up to $3,450 in tax-deductible contributions. If you have a family insurance plan, you can up your contribution to $6,850; if you’re over 55, contribute an additional $1,000.
Veterans can take advantage of veteran benefits from the Veterans Affairs Aid and Attendance (A&A benefit) to pay for care. After you receive your veterans pension, apply for this benefit in writing at your Pension Management Center.
Also, talk to an accountant and a real estate professional to see if selling your home is a viable option for helping to cover the cost of long-term care, given the current average home listing prices. In Matthews, North Carolina, for example, homes typically sell for about $307,000.
It’s Never Too Early to Start Planning
An unexpected life-changing event can devastate someone’s golden years. Without proper planning, a sudden need for long-term care can cause tremendous financial stress in an older person’s life. You can’t predict if you’ll need long-term care, but planning for the possibility will give you and your loved ones’ peace of mind — and that’s priceless.
Author
June is the co-creator of Rise Up for Caregivers, which offers support for family members and friends who have taken on the responsibility of caring for their loved ones. She is author of the upcoming book, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers.
Photo Credit: Pexels.com