Long Term Care Insurance Policy: What You Need To Know

We all hope to enjoy a fulfilling and healthy life for as long as we can. Unfortunately, health issues can get the better of us at any time.

Chronic diseases and conditions such as heart disease, stroke, and diabetes are among the most common and costly of all health problems. As of 2012, about half of all adults (117 million people) had one or more chronic health conditions. One of four adults had two or more chronic health conditions.

If you develop a chronic illness or become disabled and can no longer care for yourself for an extended period of time, are you financially prepared to pay for your extended long term care services?

According to a government report, Americans are living longer as death rates fall. As life expectancies increase, so does the duration of long-term care needs. The financial burden of these needs may fall on your family after you’ve depleted your own savings. Are your loved ones financially prepared to care for you?

If you answered no to the above questions, you might want to consider getting a long term care insurance policy.

Usually, neither your heath insurance nor Medicare will pay for extended long term care services. However, a long term care insurance policy can help protect you financially should you need extended care in the future.

Who Needs a Long Term Care Insurance Policy?

According to the statistics, 63 percent of people turning 65 will need long term care at some point in their lives. The remaining 37 percent of patients receiving long term care are under age 65.

Long term care is costly and can quickly diminish your life’s savings.

According to a Genworth 2015 Cost of Care Survey:

The median cost for a home-health aide based on 44 hours per week is $45,760 a year.

Nursing care in a facility with a private room has a median cost of $91,250 a year.

A long term care insurance policy can financially ensure you’ll have access to the best quality care when you need it, without depending on your loved ones.

A long-term care insurance policy is designed to cover a patient’s expenses if an illness, disability, or impairment becomes an interference with his or her activities of daily living.

Activities of daily living (ADL) refer to six major activities of everyday life:

Bathing
Continence
Dressing
Eating
Toileting
Walking

When you can’t do these basic things on your own, most likely you won’t be able to earn a livable salary. This is when a long term care insurance policy can protect you financially for your extended care needs.

Types of Care Covered By A Long Term Care Insurance Policy

A long-term care insurance policy pays for a wide range of services and procedures that aren’t usually covered by medical insurance.

The types of care fall into three categories:

Skilled: If you have a serious illness or injury which you can recover from, you’ll probably receive skilled care from nurses or professional therapists. Skilled care is provided daily, usually ordered by a physician, and involves a treatment plan. Skilled care is designed to help you get better.

Intermediate Care: This type of care is similar to skilled care, but is not provided on a daily basis. For example, if you injured your leg and need to visit a physical therapist five times a week to help you heal, that would be considered intermediate care.

Custodial Care: Custodial care can range from in-home care provided two or three days a week, to 24-hour nursing home care. Unlike skilled and intermediate care, which is used to improve your health, custodial care isn’t intended to heal you. Instead, custodial care includes assistance with activities of daily living.

How to Get A Long Tern Care Insurance Policy

The three primary ways to get long term care coverage are:

To buy it on your own with the help of an agent
Through your employer
Through an association or membership group

Some benefits also are available from the government, through Medicare and Medicaid. However, you should be careful about relying on government programs because Medicare covers only short-term skilled nursing home care, and Medicaid will pay for your care only if your assets are very limited.

Be sure to do your research and ask questions before buying a long term care insurance policy. This is where an insurance agent can be a valuable resource. They can help you understand the language in your policy, explain the specific terms and conditions, and guide your decision around which long term care insurance policy is right for you.

About Council for Disability Awareness

Council for Disability Awareness has written 478 posts in this blog.

The Council for Disability Awareness is a nonprofit organization dedicated to educating the American public about the risk and consequences of experiencing an income-interrupting illness or injury. The CDA engages in research, communications, and educational activities that provide information and helpful resources to wage earners, employers, financial advisors, consultants, and others who are concerned about the personal and financial impact a disability can have on wage earners and their families.