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Top 10 Reasons For Long Term Care Insurance

Plus a glossary of key long term care insurance terms.

Planning for long term care is an easy thing to put off. Maybe you think you’re too young, can’t afford it or simply won’t need it. But if you want to help preserve your choices about future care and have retirement assets and personal savings to protect, then long term care insurance could be the right vehicle for you. Here are 10 reasons why it may make sense for you:

     
  1. To help protect your assets and personal savings.
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  3. To help preserve your quality of life.
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  5. To have options for your care—with long term care insurance, you can choose to participate in deciding where and how to receive care.
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  7. To have access to appropriate care—the right policy helps ensure that the care you receive will be appropriate for your needs.
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  9. To relieve the burden of care from your loved ones.
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  11. To help leave your assets to your family, friends or charity—long term care services are expensive and, without proper planning, can quickly use up a lifetime of savings.
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  13. To gain access to a professional care coordinator in a time of crisis. A professional can help you and your family coordinate your long term care needs, which may include locating services to help with a particular illness, injury or condition.
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  15. To enable you to stay in your home for a longer period of time—comprehensive long term care insurance offers you the option of staying in your own home for as long as possible.
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  17. To stay with children without depending on them for care—long term care insurance may make it possible for a parent to stay in a child’s home without being dependent on him or her.
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  19. To help you and your family plan for the future.

 

What To Look For In A Long Term Care Insurance Policy

Once you’ve decided to investigate long term care insurance, it’s important to carefully choose a policy that meets your specific needs and goals. You should also know about some basic features of most long term care insurance policies:

     
  • Daily/monthly benefit amount: this is the amount your policy will cover toward your long term care needs for one day or one month. The amount of the benefit you choose will depend on many factors including how much you think it might cost you to stay in a nursing home in the area where you believe you will need long term care.
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  • Elimination period: this is the period of time you must wait before becoming eligible to receive covered benefits. The elimination period is the long term insurance equivalent of a deductible or “out of pocket” expense, just like your automobile or health care insurance.  But, unlike other deductibles, it is based on time, not a dollar amount.
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  • Benefit period: this is the specific period of time during which you will receive covered benefits.
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  • Inflation protection: this feature helps you keep pace with the rising costs of health care services. There may be a long period between the time when you purchase your coverage and when you actually use it. You can help protect the value of your coverage and keep up with the rising costs of health care services with inflation protection.
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  • Premium discounts: these discounts may be available if you quality for preferred health or a couple’s discount.
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  • Care coordination: the services of a health care professional can help guide the family through the process of designing a personalized plan of care.
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  • Activities of Daily Living (ADLs): the benefit trigger for many long term care insurance policies involves needing help with 2 or more of the activities of daily living for a period expected to last 90 days or more.  ADLs include bathing, eating, dressing, toileting, continence and transferring, and severe cognitive impairment (e.g, Alzheimer’s disease).
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  • Free look provision:  allows the policy owner to inspect the policy for a period of time and to return to the policy provider, if so desired, for a full refund of premiums paid.  Qualified long term care policies are required by law to provide a free look period of 30 days.
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  • Lifetime maximum benefit:  the maximum amount covering expenses under a long term care insurance policy throughout the life of that policy.  It is often described as a pool of money the policyholder can draw against and, once exhausted, the policy will pay no more benefits.
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  • Medicaid:  a joint state/federal program that pays for health care services for those with either low incomes or high medical bills in proportion to their income and assets.
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  • Medicare:  a federal program that provides medical and hospital insurance to those over the age of 65 and to certain ill or disabled persons.  Nursing home and home health care benefits are quite limited.
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  • Skilled care:  most commonly known as nursing care, this is the highest level of care provided without confining an individual to a hospital and is nearly always provided in an institution.  Skilled care is covered by Medicare on a limited basis.
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  • Intermediate care:  nursing and/or rehabilitative care provided on a frequent basis per doctor’s orders.  Nurses or nurse’s aids typically provide this care to those with limited functional ability, but not requiring care around the clock.  Intermediate care is typically not covered by Medicare.
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  • Custodial care:  designed to help individuals meeting needs of ADLs such as bathing, dressing and eating.  This care can be provided by those without professional training, but is typically not covered by Medicare.

There are additional policy features you may want to consider. Long term care insurance policies offer many forms of protection and policy structures, and that’s why it’s especially smart to seek guidance from an insurance professional who specializes in long term care insurance. Above all, get the facts before making a decision as to which long term care planning strategy is right for you.
 



     
  • Based on the average length of stay in a nursing home of 2.6 years, a person needing care today would need $198,796 for a private nursing home room.