While many people think that long term care insurance is only designed to cover nursing home expenses, it actually includes medical and support services for people with a diverse assortment of conditions. These include prolonged illnesses like strokes or cancer, cognitive dysfunctions like dementia and Alzheimer’s disease, and degenerative conditions like Parkinson’s disease. While it sometimes covers medical care, it more usually covers custodial care, individual assistance with daily living, for those who require such aid.
For most healthy people it is difficult to think of all the things that long term care insurance can provide, so it’s helpful to think of it as providing for the same sort of care that a parent must give an infant, except that the infant is generally an adult, albeit one who may need help with basic tasks like using the restroom, showering, and getting dressed, or may merely require adult supervision and help with cooking. Long term care can be provided in a nursing home or assisted living community, but it may also include a care worker coming to your own home instead.
Why Do We Need Long Term Care?
Thanks to lifestyle changes and advances in medicine, the number of people over the age of sixty-five is expected to double by the year 2050, and even today the segment of the population over the age of eighty is the fastest growing part of the American population.
While older Americans are taking better care of themselves with regular exercise and healthy eating habits, they are still more likely than younger people to suffer from chronic illnesses like strokes or Alzheimer’s disease. In fact, the likelihood of those over 65 years old needing long term care is 40%.
In addition, our culture is growing away from the tradition of taking older family members into the home to care for them personally, a result of dual-income families, children who move far from home, and a divorce rate of roughly 50%. For many elderly people the only option is professional assistance.
What to Look for In a Policy
Long term care can be incredibly expensive. Almost ten years ago the average cost for a year in a nursing home was more than $40,000 and often exceeded $100,000. Today, that cost is even more prohibitive. For this reason, it is wise to consider a long term care insurance policy. The alternative is to rely on Medicare or Medicaid, neither of which guarantees care in all settings.
When shopping for a long term care insurance policy, you should look for the following:
- Financial Stability: Choose an insurer with a solid record in the industry and a lot of financial clout. This is important as most people do not receive benefits from a long term care policy for at least a decade after inception.
- Options for this protection must be selected at the time the policy is written.
- Comprehensive Coverage: Since you won’t know when your policy is written, exactly what your circumstances will be when you need to use it, it’s important to make sure your long term care insurance will cover you in a variety of settings. This way, you will be covered whether you need a nursing home or just a home health aide.
- Daily Benefit that Meets Your Needs: Since long term care services can easily cost more than $130 /day in most parts of the United States, and soar above $200 / day in major metropolitan areas, you must be aware of what the daily benefit will be, and be certain it will meet your needs.
- Stable Premiums: Since long term care policies are “guaranteed renewable” individual policy holders cannot be given rate increases, but entire classes of policy holders can. Find out your insurer’s history of rate increases, and be wary of companies that seem significantly less expensive than the rest of the market.
In addition to all of these points, it’s a good idea to ask about the claims process when you are purchasing your long term care insurance, so that you can be prepared in the future. As well, knowing the percentage of paid claims can help you determine if the company you are considering is worth the money.
None of us wants to imagine a future in which we live out our days worrying about money, or not having care when we need it. By educating yourself about long term care insurance before you need it, you are protecting your future, and that of your family.
