At some point in our lives, about 60 percent of us will need assistance with things like getting
dressed, driving to appointments, or making meals. Planning is critical, but many people are not sure what is covered by insurance, and people are often misinformed about what is covered by Medicare.
Things You Should Know
- Long-term-care may cost more than you think.
- Medicare only pays for long-term care if you require skilled ser-vices or rehabilitative care up to 100 days and it does not pay for non-skilled assistance with Activities of Daily Living (ADL).
- The need for long-term care often follows a fall. By learning to prevent a fall, you may delay your need for long-term care and even prolong your time at home.
- Being close to children or other family is often important when long-term care services are needed.
Funding Long-term Care
- Self-funding from savings and investments
- Traditional long-term care insurance (LTCI) or Long-term care combined with life insurance
LTC insurance policies reimburse policyholders a daily amount (up to a pre-selected limit) for services to assist them with activities of daily living such as bathing, dressing, or eating. You can select a range of care options and benefits that allow you to get the services you need, where you need them.
LTCI long-term care insurance requires medical underwriting so it’s best to buy one when you’re healthy. Traditional LTC normally has a lower premium but it may increase over time. It provides no death benefit. Many consumers are reluctant to buy this type of insurance because they fear that their investment will be wasted if they do not use it. Therefore, some insurance companies have attempted to solve this problem by combining life insurance with long-term care insurance.
The death benefit can be used tax-free in advance to pay the cost of LTC and the unused balance will be paid out as a death benefit to your beneficiary. Premium normally stays the same.
Getting long-term care insurance now while you’re healthy is sound financial planning. Contact me for more information or to get your free quote.
Adapted from LongTermCare.gov