Long-Term Care Insurance

Defining long-term care insurance

Long-term care insurance refers to a variety of services that are not covered by regular health insurance or Medicare. These services include daily routine activities like daily hygiene activities, getting dresses, and assistance getting out of bed.

A long-term care insurance policy helps cover the costs of care should you develop a chronic medical condition or disability like Alzheimer’s or dementia. This type of policy will reimburse you for assistance with daily activities. The policy will help cover the costs of such assistance provided in:

  • The home
  • A nursing home
  • An assisted living facility
  • An adult day care center

When to consider purchasing long-term care coverage?

Long-term care costs are an important aspect of financial planning, especially for individuals in their 50s or older. Preexisting conditions will disqualify you for long-term care coverage, therefore you should not wait to make your decision on long-term care insurance. It is common for individuals to purchase long-term care insurance in their mid-50s to mid-60s.

Why should I buy long-term care insurance?

According to 2020 data from the Administration for Community Living, part of the U.S. Department of Health and Human Services nearly 70% of 65-year-old people will need long-term care services or support.

Health insurance does not cover the support for these essential daily activities. Medicare does not cover custodial care, including supervision and assistance with daily tasks. In most cases, Medicare only covers short nursing home stays and limited home healthcare when rehab or skilled nursing is required. 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.

In many cases, these services are likely to be needed for less than a few years, however, in some cases, these services could be needed for much longer. If you or your loved ones do not have long-term care insurance, you may have to cover the costs of this type of support out of pocket. Long-term care costs can quickly deplete retirement savings.

The cost of long-term care insurance

The cost of long-term care insurance will depend upon the range of benefits and options you choose. Other factors affecting the cost of a long-term care insurance policy include:

  • Your age and health – The older you are and the more health problems you have, will increase the price of your policy.
  • Your Gender – Women generally pay more than men because on average they live longer and have a greater chance of making long-term care insurance claims.
  • Marital status – Premiums are lower for married people than for single people.
  • Insurance companies – Prices for the same amount of coverage will vary among insurance companies. That’s why it’s important to compare quotes from different carriers.

When to purchase a long-term care policy?

If you are in your 50s or 60s, long-term care insurance is an important factor in your overall financial planning. It may not be smart for people over the age of 65 to rely solely on Medicare or private health insurance. Medicare does not cover custodial care, and private health insurance rarely pays any long-term care costs. Depending on your financial situation, long-term care insurance could be a great option for peace of mind and financial benefits as you age.

Our knowledgeable agents at Premier Planning Services are happy to assist you in finding a long-term care insurance policy that suits your needs.

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