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Long Term Care Insurance:  10 Frequently Asked Questions

Long term care could be one of the biggest age-related challenges we face. Take a moment to ask yourself: Do you have a long term care plan? If your plan involves other family members or friends, have you spoken to them about it? Chances are you may not be prepared to handle the costs of long term care needs should you get sick or be unable to stay in your home. That’s where long term care insurance comes in. Here are the answers to the 10 most frequently asked questions about this type of insurance.

1. “What exactly is long term care insurance?”
Like other types of insurance, long term care insurance helps you guard against risk. It allows you to help protect your assets and help reimburse the expenses of long term care services when you are no longer able to care for yourself. Typically, long term care insurance can be used to help pay for home care, facility care or adult daycare. It may also include therapies and special equipment such as walkers and wheelchairs.

2. “Does my health insurance cover long term care?”
Read your health insurance plan carefully. Most traditional health insurance plans will not cover long term care expenses because long term care is not considered to be medical care. Your medical plan may provide limited, if any, coverage for long term care services.

3. “Are there government programs available to provide for this care?”
Many mistakenly believe that Medicare or Medicaid will pay for extended long term care needs. They usually will not. Generally, Medicare may cover some nursing home care, but only for a limited time. It was not intended to pay for extended long term care.  Medicaid will only cover long term care costs after a person “spends down” or depletes his or her assets to qualify for assistance. Those who live in facilities today, or receive help in their own homes for an extended period of time, typically pay out of pocket. For many, the best solution to the prospect of high long term care costs may be long term care insurance.

4. “Who needs long term care?”
When most of us think of long term care, we probably think of it primarily for the elderly. But you may be surprised to learn that people of all ages need long term care.  A health crisis can occur at any age—you can suddenly need long term care if you have a serious accident, develop an illness or get a disabling disease. Some common reasons young people may need long term care are strokes, Parkinson’s disease, cancer, multiple sclerosis and accidents.

5. “Doesn’t my retirement plan provide for long term care services and costs?”
Long term care insurance is an alternative to saving your assets for possible long term care needs. You can use your assets for the things you originally planned for such as education, inheritance, charitable gifts or travel.  It’s all about having choices.

6. “How can I be sure to get the type of care I want?”
By making choices today, you are giving yourself more options for tomorrow. When you are paying for long term care services, either out-of-pocket or through long term care insurance reimbursement, you are in control. With comprehensive long term care insurance, you have access to multiple facilities. As a “private pay” patient who pays with your own money or with long term care insurance, you will have the freedom to participate in choosing the type and location of care that best meets your own personal needs. You may wish to remain in your own home or attend an adult daycare center. Either way, you have a voice.

7. “Can’t I handle my spouse’s long term care needs myself?”
If your spouse or partner needs long term care, you may not always be able to provide it. Consider the responsibilities of a caregiver. You may have to give up work either temporarily or permanently. Would this put a financial burden on your household? As a caregiver, would you be able to handle the emotional and physical stress of dealing with situations you have not been trained or prepared for? And if you were to unable to care for your spouse or partner who depends on you, who would provide that care and would there be enough money to pay for it?

Also consider what would happen if you needed care. Have you determined whether your spouse or partner or other family member would be able to provide for you? Have you talked about this responsibility with them? Would they be able to give up their job to help you if need be and would it cause a financial burden for them to take care of you? Long term care insurance provides the funds to access care services when family members are unable to be the caregivers.

8. “When is the right time to buy long term care insurance?”
Purchasing long term care insurance at a younger age has several advantages. For instance, premiums are typically lower and your health is usually better. Keep in mind that you need to be reasonably healthy to qualify for long term care insurance.

9. “How do I know if I can afford long term care insurance?”
As a general rule, the premium should not affect your standard of living. You should be able to comfortably afford it without having it become a financial burden. A long term care insurance agent can help determine if the purchase of long term care insurance is appropriate in relation to your financial resources.

10. “What does long term care insurance cost?”
The cost of long term care insurance can vary. Your age, health, amount of protection, benefits and features are all major factors. The costs of long term care insurance may be small when compared to the actual costs of long term care services.



     
  • 9 million: Number of Americans now 65 or older who will require long term care. This number is expected to rise by 25 percent–to 12 million–by 2020.