Long Term Care Insurance

If you have seen the financial burdens placed on a family due to the long term care needed by a family member because they could not perform some of the basic functions so many of us take for granted, then you understand the need and importance of long term care insurance. Maybe you haven't experienced this yet, but realize the implications and potential of needing long term care for someone you love.

What Exactly is Long Term Care Insurance?

Long term care insurance is an insurance coverage that provides services to those who cannot perform two or more basic functions. Basic functions are defined by most insurance companies as dressing, bathing, feeding oneself, going to the bathroom, walking, getting in and out of bed, and standing and sitting by oneself.

Long Term Care Insurance vs. Disability Insurance vs. Health Insurance

Do not confuse long term care insurance with disability insurance or major medical health insurance. Long term care insurance is purchased specifically for the care of a person should they become unable to care for themselves. Long term disability insurance is purchased to cover a person’s salary should they be too ill to work for a long period of time (usually 120 days) and does not cover long term at home care, which is why a separate long term care insurance policy is usually recommended. Health insurance covers someone who needs medical attention such as surgery, prescriptions, doctor visits, etc.

Who Needs Long Term Care Insurance?

Long term care insurance is recommended for all individuals over the age of 55 years old and most long care insurance companies will not accept new policies from individuals over the age of 65. This is because past statistics have shown the risk of long term injury increases at this age. However, new studies do show that the risk does not increase over the whole population until the age of 85 because our quality of life and medications to extend life have gotten better over the last several years.

The Cost of Long Term Care Insurance

This differential of age is what helps keep long term insurance premiums more reasonable than other kinds of insurance. In fact, long term care insurance premiums have not increase in the manner of other insurances. The increases are minimal and are based on the age of the recipient rather than the rising cost of medical care.

Long term care insurance premiums vary from state to state and are also determined by the general health and age of the person purchasing the insurance. Although it is not recommended that younger individuals purchase long term care insurance, if there is family history of things like cancer, early onset Alzheimer’s disease, etc., then it should be considered at an earlier age.

The premiums for long term care insurance also vary on the type of plan that an individual purchases. You may purchase plans that cover a varying amount of time from 24 months to 15 years and every time frame in-between. It may be important to note that while the average length of time a person receives long term care is three years, it is unusual for an individual to require more time than that, either due to death or recovery.

The longer the term of coverage the more expensive the premiums will be. In addition, participants may choose the length of time they must be unable to care for themselves before the insurance takes effect. This can range from the moment a doctor recommends long term care which brings the highest premiums, or even a year or more after that, which brings the lowest premiums. The decision of how long to wait before making a claim should be determined by the financial ability of the family to pay for long term care before it becomes a financial burden.

Does Medicaid or Medicare Cover Long Term Care Expenses?

For individuals with Medicaid and Medicare it is important that they realize that neither of these insurance plans will cover long term care, so other long term insurance arrangements should be made. There are state programs for those individuals who need long term care due to mental or physical disabilities sustained before the age of 21, however those programs cannot be applied to individuals who require long term care as adults due to age, accident, or illness.

Anyone who wonders if they need long term care insurance should spend a little time doing research on the cost of long term care. The national average cost of long term care is about $235 a day for in-home care, $3,200 a month for an assisted living facility, and $3,600 a week for a nursing home. Such costs show how important it is for individuals to purchase long term care insurance.

How Does Long Term Care Insurance Work?

Most long term care insurance is paid to the participants after they pay the costs out of pocket. Long term care insurance has a daily maximum amount allowed, so on the reimbursement program if the daily maximum s $230 a day and the participant receives care at $200 a day, they are reimbursed exactly the amount that they spend. Conversely, if the cost is $250 a day then the participant pays $20 a day out of pocket.

If the participant chooses a long term indemnity policy (more expensive), then the long term insurance care will cover a set amount no matter how much money is spent. If the coverage is for $230 a day and the participant spends $200 a day, then the participant receives $30 a day extra.

Long Term Care Insurance Rates

Because the long term care insurance rates vary from state to state, we would like to invite you to use the quote tool above to get rates on long term care insurance in your state. Getting comparisons is an important part of the insurance purchasing process and will ensure that you get the best service possible at the best rates! Why not start now?