Long-Term Care Insurance Quote Forms
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Long-Term Care Insurance Information
It might be hard to imagine now, but chances are you’ll need some help taking care of yourself later in life.
The big question is: How will you pay for it?
Buying long-term care insurance is one way to prepare. Long-term care refers to a host of services that aren’t covered by regular health insurance. This includes assistance with routine daily activities, like bathing, dressing or getting in and out of bed.
A long-term care insurance policy helps cover the costs of that care when you have a chronic medical condition, a disability or a disorder such as Alzheimer’s disease.
Most policies will reimburse you for care given in a variety of places, such as:
*Your home. *A nursing home. *An assisted living facility. *An adult day care center.
Considering long-term care costs is an important part of any long-range financial plan, especially in your 50 and beyond. Waiting until you need care to buy coverage is not an option. You won’t qualify for long-term care insurance if you already have a debilitating condition. Most people with long-term care insurance buy it in their mid-50s to mid-60s.
Whether long-term care insurance is the right choice depends on your situation and preferences.
About half of 65-year-old person today will eventually develop a disability and require some long-term care services, according to a study revised in 2016 by the Urban Institute and the U.S. Department of Health & Human Services. Most will need services for less than two years, but about 14% will require care for more than five years.
Regular health insurance doesn’t cover long-term care. And Medicare won’t come to the rescue, either; it covers only short nursing home stays or limited amounts of home health care when you require skilled nursing or rehab. It does not pay for custodial care, which includes supervision and help with day-to-day tasks. If you don’t have insurance to cover long-term care, you’ll have to pay for it yourself. You can get help through Medicaid, the federal and state health insurance program for those with low incomes, but only after you’ve exhausted most of your savings.
People buy long-term care insurance for two reasons:
- To protect savings. Long-term care costs can deplete a retirement nest egg quickly. The median cost of care in a semi-private nursing home room is $89,297 a year, according to Genworth’s 2018 Cost of Care Survey.
ANNUAL MEDIAN COSTS OF LONG-TERM CARE IN 2018
2. To give you more choices for care. The more money you can spend, the better the quality of care you can get. If you have to rely on Medicaid, your choices will be limited to the nursing homes that accept payments from the government program. Medicaid does not pay for assisted living in many states.
Buying long-term care insurance might not be affordable if you have a low income and little savings. The National Association of Insurance Commissioners says some experts recommend spending no more than 5% of your income on a long-term care policy.
Alternatives to buying traditional Long Term Care Insurance
Save money for long-term care
If you have robust savings, you could plan to pay for long-term care out of pocket.
Tap into ‘living benefits’ on a life insurance policy
- Pro: You don’t risk paying for insurance that you may never use.
- Con: A few years of care could put a big dent in your savings, leaving less money for your heirs. You could also run out of money. In that case, you could apply for coverage through Medicaid, which would pay for nursing home care. But then your options would be limited to facilities that accept Medicaid patients. And the program doesn’t pay for assisted living in every state.
This feature is sometimes called “accelerated death benefits” and is available on most permanent life insurance policies such as whole life insurance. It lets you take a portion of the life insurance payout while you’re still alive to pay for medical expenses, including long-term care. The death benefit is reduced by the amount used for long-term care.
- Pro: The cost is included in your rates on some life insurance policies, and you can add it for a small cost on others when you buy.
- Con: The triggers for when you can access the benefits for care vary by company, so read the fine print carefully. A trigger could be diagnosis of a terminal illness. Also, using the policy for long-term care reduces the payout your beneficiaries will get.
Buy a combination long-term care/life insurance policy
These policies, also called asset-based or hybrid life insurance and long-term care insurance policies, provide a pot of money for long-term care if you need it or a death benefit to your beneficiary if you don’t max out the long-term care benefits. Typically you pay one large premium upfront, such as $75,000, or a few large payments over a few years. Under some policies, you can get your money back if you decide years later you don’t want the policy.
- Pro: You get something for your money even if you never use the long-term care portion of the policy. If you don’t use it for long-term care, or don’t use all of it, your beneficiary gets a life insurance payout when you die.
- Con: It’s an option only if you have a large sum of money to spend.
There are two critical components when considering how to choose an LTC plan:
- How MUCH protection you need
- How SOON you’ll need it
How much protection do I need?
When choosing how MUCH protection you need, consider the following:
- If you need care, who will provide it?
- For the person providing the care, are they going to be paid? By whom?
- A recent study on family-member caregivers found that approximately 1/3 of caregivers provide 30 hours – or more- of care per week. Half of those who do so estimate that they lost around close to 1/3 of their income due to the demands of providing care. On the other hand, 55% of care recipients had to leave their job because of a long term care event.
- If you need care, where do you want to receive it?
Call our office now to set up a time to visit about what plan may work for you!! 636-791-1330