Long Term Care Health Insurance - A Closer Look
If you're wondering whether or not you need long term care insurance, chances are that the answer is yes. Approximately five million people are currently receiving some form of long term health care and with an aging population, this number is only increasing. Long term health care can be expensive, but fortunately there’s a way to protect your assets with insurance.
This post will cover:
-Whose needs qualify for long-term care (LTC) coverage?
-The costs of LTC
-Understanding the differences between different LTC policies and
-What other resources are available in times of need.
Long term care insurance was initially designed to help people pay for the costs of providing long term care. The idea is to take out a policy that will pay for your care. Unfortunately, long term care costs are high and most individuals do not have enough assets to be able to afford their own LTC coverage. Long term care insurance can help solve this problem by providing those who qualify with the financial means to pay for it themselves.
The main ways in which Long Term Care Insurance can protect assets include: (1) paying your LTC bills and expenses, and/or (2) providing money towards the purchase of a home so that you can continue living in that house after you start receiving LTC services.
If you are thinking about getting long term care insurance, perhaps you should think about making sure that you qualify. For the purposes of this article, we will assume that the individual requesting coverage is aged 65 or older and has less than 20 years left to live.
In order to qualify for long term care insurance, you must be able to prove that you will need LTC services within a certain period of time (usually 6 months). The reason why the policy has a short duration is because there are often very high LTC costs associated with providing this kind of service. Therefore, it is not practical to take out a policy for who knows how many years and not expect it to cover anything.
The long term care definition of LTC is quite broad. Under most plans, “LTC services” are considered to include things such as rehabilitative therapy, skilled nursing, and home health care. If you would like to know what services you can expect to receive under a given policy and its cost coverage, be sure to ask for a complete list of services provided.
The costs of long term health care can be enormous (and sometimes unaffordable). Let’s say that you are married and live in California where the costs for LTC are the highest in the country [1]. Let’s also assume that you or your spouse have some income available and will be receiving Social Security benefits.
Example 1: You're married and both you and your spouse have some income available. You would like to obtain long term care insurance. The estimated monthly payment for one person is $3,100 while the estimated monthly payment for both of you together is $6,200 [2]. Less than half of this amount ($1,700) will be paid by the policy. The other half ($2,900) must be paid by you and/or your spouse.
Example 2: You’re married and have some extra money available to get an LTC policy. The estimated monthly payment is $5,800 [2]. The policy will pay all costs in the year you enter a care facility. This means that there is no estimated out of pocket expense or premium for the first year of coverage. However, beginning in the second year, you will have to pay $3,600 per month which includes your premiums and out of pocket expenses (this total is less than what was paid in the first year).
If you don’t have any income available to pay for your LTC costs, then you will likely be eligible for Medicaid benefits. However Medicaid regulations are very complicated and often difficult to understand. If you need help understanding the process, you can visit your local public assistance office.
There are many ways to get LTC insurance. You can take out a permanent policy, purchase term life insurance, or obtain a combination of these two types of coverage. Here are some examples:
Example 1: You’re married and have some extra money available for an LTC policy. The estimated monthly payment is $5,800 [2]. The yearly premium will be $2,100 and the remaining yearly premium will be paid by your spouse ($1,600).
Example 2: You’re married and have some extra money available for an LTC policy. The estimated monthly payment is $5,800 [2]. The annual premium will be $3,225 and the remaining cost will be paid by your spouse ($2,575).
Example 3: You’re married and have some extra money available for an LTC policy. The estimated monthly payment is $5,800 [2]. This total amount will be paid out in monthly premiums to the insurance company.
Example 4: You're unmarried and have some extra money for an LTC policy. The estimated monthly payment is $2,400 [2]. The quarterly premium will be $813 with an out of pocket expense of $1,587.
Example 5: You’re unmarried and have some extra money for an LTC policy. The estimated monthly payment is $2,400 [2]. The quarterly premium will be $1,350 with an out of pocket expense of $1,050.
If you would like to find out more about your options of getting long term care insurance (and how much your policy will cover), there are a few things that you can do:
-Do a quick internet search for “long-term care insurance” or "LTC" and find an independent agency in your area. These agencies are trained to give you the information that you need to make informed decisions about LTC coverage. -Visit your local public assistance office. The staff there are trained to deal with the complicated rules and regulations of the health care system. They can also give you some general information about long term care insurance. -Contact your financial advisor, accountant, or other trusted individual who has knowledge about LTC insurance. This person may be able to suggest a qualified agency in your area that would give you a free consultation (and will then charge a service fee for this service).
It is very important to find an affordable policy with adequate benefits. Remember the amount of money you will have available every month after you have paid for other basic expenses such as rent, food, and utilities is often hardly enough to cover LTC expenses .
Conclusion:
Long term care insurance is available and affordable. If you know what you're looking for, it can be a great way to ensure that your loved ones won't have to spend their life savings on your health care bills.
Many people purchase coverage under a family plan which covers the expenses of multiple people. Other individuals choose to purchase individual policies. The following factors influence the cost of LTC insurance:
-Type of policy (individual, couple, family) -Location -Age of applicant (under 65 or over 65) -Financial status (income and assets)
The cost of applying for an LTC policy will also vary from one person to another. The main difference will be whether or not you have an existing medical condition.