Long-Term Care planning is something that most of us have encountered at one time or another; whether it’s something we want to think about or not. It can be a potentially troublesome issue (financially speaking) for those who find themselves in a situation where it is needed—which according to the U.S. Department of Health and Human Services, is nearly 70 percent of Americans 65 and older.
One of the things that are covered by a long-term care insurance policy is nursing home care or assisted living facilities. But according to nationwide surveys, more than half of adults over age 50 say they would rather die than live in a nursing home.
Strong words to be sure. The issue is that out-of-control healthcare expenses can be a real concern in retirement, and nursing homes or assisted living facilities are sometimes the only, if not the best, option. Nursing home care in a private room is now more than $100,000 a year.
About one in four long-term care claims is attributed to Alzheimer’s. Other claims are attributed to physical issues ranging from chronic illnesses to injuries and disabilities. As people age or become ill, they sometimes need help doing daily tasks like getting dressed, bathing, and more. Long-term care (LTC) provides people with those services—but it’s expensive. Most health and disability insurances won’t cover long-term care, but long-term care insurance will.
This type of insurance is one of the more complex types of insurance you may consider, and there are many factors that can influence your choices. Here are some things to consider that may help you better understand the costs and benefits.
Policies normally pay benefits by the day, week, or month. You may want to evaluate what long-term care facilities in your area are charging before committing to a policy.
Some policies limit the total benefit they’ll pay over the life of the policy. This could be stated in years or in total dollar amounts.
Insurance companies use certain criteria to start benefits. Commonly, this is an inability to do a certain number of activities of daily living without assistance.
Many policies have benefits for Alzheimer’s disease as well.
More questions should be asked of your considered provider so that you can get a full picture of the available benefits.
Another important thing to consider is that having an alternative safety net at your disposal (investments for example) will offset the potential costs of long-term care. Think of it as a savings account for the out-of-pocket costs that may incur during a scenario where long-term care is required.
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