Index | Long Term Care | Long-term Care Insurance
Long-term Care Insurance
As we get older, we need to think of issues that seemed unimportant or even unrealistic when we were young. When we start awakening to the natural course of life, we also realize that we have to prepare for possible hardships the old age may bring. The good news is that the life span of our citizens increases, but as the time machine has not been created yet; the expended life-time might mean the extension of the years of illness and disability rather than of the years of youth and vitality. According to statistics, one out of every two people will need long-term care at some point of their life, and about 60% of individuals over age 65 will require some kind of special care services.
Long-term ?are Insurance (LTC or LTCI) is an insurance product which helps to pay for the cost of long-term care when you cannot care for yourself. Long-term care provides the assistance an individual may need if he/she has some disability or a chronic illness which makes it impossible to care for oneself. Inability to care for oneself means inability to perform the activities of daily living (ADLs), which are eating, toileting, continence, transferring, dressing, bathing, and walking. It can be the result not only of old age, but also of mental or physical illness, or injury. The most common cases associated with long-term care include cancer, a stroke, Parkinson's, Alzheimer's disease and disability. A person is said to need "long-term care" in case he/she is unable to do two or more of these basic activities, or in case he/she suffers a cognitive impairment.
Long-term Care Insurance covers the costs of help in your home with daily activities like bathing, dressing, eating and cleaning, visiting nurses, or care in a nursing home; assisted living services, such as meals, help with daily activities, health monitoring etc, that are provided in a special residential setting; services in an adult daycare center etc. A long-term insurance policy also provides for an opportunity to make your own choices about what long-term care services you will receive and about the place where you will receive them.
Age, however, is not the crucial factor when it comes to long-term care. About 40% of people who receive long-term care services are between 18 and 64. Of course, older people tend to use the most long-term care, but a young or middle-aged person might also need such services due to an accident or a serious illness.
There are two categories of long-term help people may need: custodial or personal care and skilled nursing care or rehabilitation. Custodial care is a help with the activities of daily living for disabled people, and supervision, protection and help with everyday tasks for people with cognitive impairments. Skilled nursing care can be provided either in the home or in a nursing facility and refers to medical, nursing, or rehabilitative services.
LTCI covers care expenses which are usually not covered by your ordinary health insurance, Medicare, or Medicaid. Health insurance does not cover nursing home care. Medicare won't pay for custodial care and has certain eligibility requirements for skilled nursing care. Individuals, who are over 65, should not rely on Medicare or private health insurance for long-term care. As for Medicaid, it is a welfare government program for very poor people, which is not meant to cover long-term care costs for those who don't qualify.
Most people rely on their family members for support and care, however, Long-term Care Insurance may be a much better option in terms of compensating your expenses. The cost of providing long-term care services may be enormous, and having insurance to help pay for it is very valuable. Long-term Care Insurance is designed to protect your family's finances and your own assets and savings, since long-term care services go beyond medical and nursing care and can be very expensive. Besides protecting your assets, it also helps minimize your dependence on family members, as well as control the place and process of receiving long-term care services.
Long-term Care Insurance is not beneficial for everyone. First off, it is rather expensive. You need to make sure you can afford paying the premiums in case your income lowers. Long-term Care Insurance, just like all other insurance products, requires you to pay regular premiums. This, in its turn, ensures that you won't pay a huge amount out of your own pocket in the event of a serious condition. Purchasing a policy with high premiums cost that are likely to lower your standard of living and cause some financial hardship can hardly be called beneficial. It takes a thorough financial analysis to determine whether Long-term Care Insurance is appropriate in a particular situation. Besides making a financial analysis, consumers need to analyze the reasons for buying a policy, as well as their ability to pay for it every year for the rest of their life. Thus, Long-term Care Insurance is recommended for people with significant assets who wouldn't like to burden their family with nursing home bills.
The risk that a person will need a nursing home care increases with age. A lot of people don't think about it until they get into their 70s and start experiencing health problems. However, in case you have current health problems that are likely to result in the need for long-term care, insurance companies won't offer you a policy, as in this case there is a high risk of losses for the insurance company. In case they still decide to sell you the policy, the premiums are most likely to be extremely high.
Probably the best time when you are most likely to be eligible to purchase Long-term Care Insurance is your middle-age. At this stage, the premium costs will be lower. In case you buy a policy after 65, you may not pass the medical tests and the premiums will be higher.
You cannot buy Long-term Care Insurance when you need to use it, i.e. it is too late to purchase it when you are unhealthy. Therefore, it is important to consider the necessity of this insurance beforehand. Take into consideration your health condition, your age, income and overall financial situation and perspective, and discuss it with your family members. If it happens so that you may need the extended health care, Long-term Care Insurance will protect you, as well as your loved ones.