What Senior Citizens Need To Know About Private Long Term Care Insurance
Did you know that as of 2018 there were over 5.2 million Americans over the age of 65 who are living in nursing homes? With a population that large, it’s no surprise that there are plenty of different options available for long term care. However, many senior citizens might not have the knowledge they need to make informed decisions about their future care options. That's why we've put together a list of things seniors should know about private long term care insurance — from how it works and whether or not they need it, to how much coverage costs and what the policies cover.
The Ins And Outs Of Private Long Term Care Insurance
Long term care insurance is designed to support senior citizens who are planning to spend some time in a nursing home or other long term care setting. On average, the average American senior citizen expects to live for about three years after retiring from their job. Therefore, it's important for retirees to consider the cost of their future long term care needs before they actually enter a nursing home. The good news is that senior citizens do have options available for long term care in their own home if they have private health insurance coverage. "Private long term care" health insurance policies are designed to cover any costs associated with an individual's medical needs during and after retirement. These policies are different from "private health insurance" in that they only cover care related to a long term care need, and not other medical expenses. Many of these insurance policies even cover living costs for seniors who live on their own, as well as caregivers who help them with daily tasks like dressing or bathing.
How Long Term Care Insurance Works
Long term care insurance works differently than private health insurance, because it covers specific types of medical treatment and does not include all benefits of traditional health coverage plans. There are two kinds of long term care policies: "private pay" and "government sponsored." Private pay plans are bought directly from an insurance company by the senior citizen or their family. They can be purchased as part of a health insurance carrier's policy or on their own. Government sponsored plans, on the other hand, are purchased through a Medicare supplement policy that is offered through the government's Medicare program. Long term care insurance companies offer both of these types of policies in order to meet the needs of those who choose to purchase them.
Following are some of the details about each type of long term care insurance policy:
Private Pay Policies Private pay policies are purchased by people who want to ensure there is no gap between their retirement and the start date of their long term care coverage. However, private pay policies do not cover all medical expenses during and after retirement. Depending on the type of policy you choose, it may cover certain expenses like prescription drugs, dental care or vision needs. However, it will not include medical coverage for injuries that occur after you stop working. Private pay policies may also leave seniors with higher medical expenses if they lose their job during their retirement. Additionally, this type of insurance does not cover the costs of long term care in a nursing home, but may cover some long term care costs in a senior's home under certain circumstances. While nursing home costs are typically high and can easily put a financial strain on seniors living on a fixed income, government sponsored plans may not be as accessible for everyone as they once were.
Government Sponsored Policies Government sponsored policies are available to Medicare recipients who want more comprehensive coverage options than what is offered through the government's Medicare program. However, these plans offer fewer benefits than private pay plans. The average person can receive three to six months worth of coverage, and they may not include prescription drugs or dental care in their plan. Additionally, only a small pool of people get approved for government sponsored long term care insurance policies each year, which could affect your ability to obtain a policy later in life.
The Costs Of Long Term Care Insurance
It can be difficult for senior citizens to obtain private long term care insurance because of health factors that may affect their eligibility for coverage. Eligibility for coverage may vary based on age, health and employment status. Many long term care insurance companies offer premiums that are based on a person's age when they purchase their plan. As a result, the cost of buying a policy earlier in life may be lower than it will be later in life. Additionally, premium prices can change based upon the amount of coverage that is purchased by an individual. When it comes to government sponsored long term care policies, you may have to wait until you are between the ages of 50 and 64 years old in order to qualify for this type of coverage.
The average cost for a private pay policy is around $1,500 per year, although this can vary depending on the cost of coverage. However, the cost of government sponsored long term care policies is based on many factors that can't be predicted in advance. The amount of coverage you need and how much you are willing to spend on your policy depends largely upon how long you plan to live in a retirement community or nursing home. If you expect to live longer than six months after retiring from your job, private long term care insurance may not be the best option for you. If you plan on living in your own home for the rest of your life, government sponsored long term care insurance may be a good option.
Before purchasing long term care coverage, you should compare the different types of plans to learn which one may work best for you. It is important to speak with a knowledgeable long term care insurance broker who can help you determine how much coverage you need and how much it will cost. Long term care insurance policies from financial companies that are not appropriately licensed in your state may not be available to residents of that state. To learn more about purchasing long term care insurance, speak with your local long term care insurance agent today.
Resources:
https://en.wikipedia.org/wiki/Long-term_care_(insurance)#Government_sponsored_plans
https://www.nursinghomecompare.com/medicare-supplemental-long-term-care-plans.
Conclusion
Thank you for inviting us into your home. We want to help you and your family during this difficult time. It’s our honor to help you with your planning needs.
Please feel free to call or email me at anytime at: 617-639-2701 or karen@kcohenbrock.com.