Considering Long Term Care Insurance - Is it An Unnecessary Expense?
The long term care needs of the elderly population in the U.S. are on the rise, and as more Americans are reaching senior status, so is their need for long-term care insurance. The three most common types of long-term care insurance plans include: a private policy provided by an insurer; Medicaid, which operates on a state-by-state basis; and Medicare.
While all three options have benefits and disadvantages, there's no denying that with whole life insurance rates going up continuously due to increasing demand as well as changes to tax laws that affect retirement savings accounts, it can be wise to consider purchasing a long term care policy sooner rather than later when shopping for your next car or house.
Long-term care insurance policies buy you peace of mind. They help you to avoid having to make potentially difficult decisions that could severely negatively affect your family's financial situation and quality of life. Without a long term care policy, someone who requires long-term care needs may need to go on Medicaid if they're not wealthy enough to pay for the costs associated with nursing home and other personal care services.
The purpose of this article is to help you make an informed decision about whether long term care insurance is a good option for your family. Here is what you can expect to learn by reading this article:
What are the benefits and the downfalls of long term care insurance.
How a long-term care insurance policy works.
The various types of long term care insurance available today.
Costs vs. benefits of long-term care insurance plans, and which type may be best for your family.
In this article I will describe in detail the information that you should look for when shopping for long-term care insurance before purchasing a policy from an insurer or private provider. This article is meant to serve as an educational resource and does not provide legal advice.
Understanding long term care insurance: common misconceptions
Before we begin to discuss the benefits of long-term care insurance, it's important to get a better understanding of what it is, how it works and why you need it. Long term care is any kind of health-related treatment or services that allow individuals with chronic illness or disabilities live independently in their homes and communities as opposed to nursing facilities.
Many people believe that once they reach some point in their senior years, they will automatically be eligible for Medicaid and receive all the benefits that come with such a benefit. Unfortunately, this isn't always the case. In fact, long-term care costs can be extremely high for some families.
Medicaid is a public health benefit made possible by the federal government. It provides medical and/or nursing home services to low-income seniors eligible for benefits under the Social Security Act. If your family income falls below a certain level or you're not eligible for Medicaid, private long term care insurance may be better suited to protect you and your loved ones from unexpected costs associated with long term care.
You could also be required to sell your home or other assets in order to pay for your long term care expenses if you don't have a long-term care insurance policy and are not eligible for Medicaid.
Benefits of long term care insurance
Before you buy a long-term care insurance plan, it's important to know what the benefits are that come with it. This way, you'll know whether or not such coverage will be beneficial for your family and at what cost. Long-term care plans provide different levels of financial protection for your loved ones in the event that you become unable to perform daily tasks on your own because of chronic physical, mental and/or cognitive impairments.
Below is a short list of the benefits of long-term care insurance and the ways it may be beneficial to you and your family. However, before you consider purchasing a long term care policy, it's important to know what long term care insurance plans cover, what long term care policies won't cover as well as the costs associated with these policies.
Income Protection: In case you need to remain in the home for an extended period of time because you cannot perform daily tasks on your own or are unable to move around freely and independently, many types of long-term care insurance plans will provide an income protection benefit. You may be paid a certain amount of money each month just to help you cover expenses associated with healthcare, food, utilities and other daily living expenses.
In case you need to remain in the home for an extended period of time because you cannot perform daily tasks on your own or are unable to move around freely and independently, many types of long-term care insurance plans will provide an income protection benefit. You may be paid a certain amount of money each month just to help you cover expenses associated with healthcare, food, utilities and other daily living expenses. Care Assistance: If you live in a by-the-hour nursing home, the costs can add up quickly. With a long term care insurance policy, you may be covered for those expenses as well. Many types of policies provide coverage when you need highly specialized care such as hospice or assisted living in a private home.
If you live in a by-the-hour nursing home, the costs can add up quickly. With a long term care insurance policy, you may be covered for those expenses as well. Many types of policies provide coverage when you need highly specialized care such as hospice or assisted living in a private home. Assisted Living: Assisted living with in-home personal care services may be provided to limit the stress on your loved ones and improve their quality of life. With a long term care insurance policy, you may receive some level of coverage for the costs associated with this type of care.
Assisted living with in-home personal care services may be provided to limit the stress on your loved ones and improve their quality of life. With a long term care insurance policy, you may receive some level of coverage for the costs associated with this type of care. Nursing Home Care: Most individuals prefer to stay in their own homes as long as possible. However, as we age, our physical abilities and/or mental well-being can deteriorate to the point where we are no longer able to live independently in our homes. If you do not have a living will and don't have the proper healthcare directives in place, Medicaid may not pay for these types of expenses. With a long term care insurance policy, you may be able to stay in your home for a longer period of time before moving into a nursing home.
Most individuals prefer to stay in their own homes as long as possible.
Conclusion
While it is possible to manage without long-term care insurance, the reality is that you may have to move into a nursing home before you are ready or don't have the financial means to handle all healthcare costs. If this happens, you could face the cost of maintaining a private nursing home as well as paying down your mortgage or other debt, which could be difficult if you are financially strapped.
Even if you want to move into a nursing home, you may not be able to afford it. A long-term care insurance policy could help your family pay these bills, and some of these policies even allow for additional funds paid out in case of accidental death or disability.