Long term care (LTC) refers to the type of care or help you might need for conditions related to the natural course of aging, or to an accident, disability, chronic illness, or cognitive impairment, such as Alzheimer's disease. It is the type of care you need when you are unable to care for yourself. Long term care can include in-home care, community-based care, assisted-living facility care and nursing home care.
2. Why should I think about long-term care insurance?
"Statistics suggest that 25% to 50% of elderly people will require some form of long-term care. Those who do, will draw on their policies an average of four years" (The Wall Street Journal, 11/4/2006).
"Nursing homes cost about $74,000 per year, while assisted living centers were about $35,600 annually…Home-care costs run about $19 an hour, which can pile up" (The Wall Street Journal, 11/4/2006)
The best time to purchase long-term-care (LTC) coverage is when you're young and in good health. If you wait too long, you may not qualify based on changes in your health status. Also, three in ten people believe that their long-term care costs can be paid with sources that are not viable, such as Medicare, health insurance, and disability insurance. Without long-term care insurance you may have to deplete your savings or children's inheritance to pay for your, and/or your spouse's, care.
• One in three American voluntarily provide unpaid informal care each year to one or more ill or disabled family members or friends. 52 million Americans (31 percent of the adult population age 20 to 75) provide informal care to a family member of friend who is ill or disabled. (Informal Caregiving Compassion in Action developed by DHHS)
• Although 58% of individuals needing long-term care services are the elderly, 40% are working age adults (AARP Fact Sheet FS27R).
Called the "Sandwich Generation", it includes millions of American's who juggle their parent's and children's needs (never mind their own). "According to a study from the National Alliance for Caregiving and the American Association of Retired Persons, there are more than 9 million Americans in this situation, 40% of them between 35 and 49" (Money Magazine October 1999).
3. If I already have health insurance why do I need long term care protection?
In fact, many people incorrectly believe “other health insurance” will pay for their long-term care. The truth is surprising: long-term care is NOT covered by other kinds of insurance, including your HMO, health or long-term disability insurance. Only long-term care insurance you typically purchase on your own covers day-to-day personal care assistance when you are unable to perform everyday activities like bathing and dressing. 4. Does long-term care coverage only pay for nursing home care?
No. Today, most new long-term-care policies pay for care in one's home, an assisted living facility, adult day care, at a hospice facility or hospice services in the home. Today's policies also pay for home modification, if this will prolong your ability to stay home and be independent.
5. What are the possibilities of my needing long-term care?
• For a couple turning 65, there is a 70% chance that one of them will need long-term care. (Wall Street Journal)
• An estimated nine million people 65-plus will need long-term care in 2006, and that number may increase to twelve million in 2020. (U.S. Department of Health & Human Services, Medicare, Long-Term Care Home)
• The average cost of a two to three year stay in a nursing home could potentially exhaust the assets of most elderly Americans. (The Prudential Insurance Company of America)
6. If I presently have long-term Disability Insurance through the company I work for should I also purchase long-term care insurance?
Long-term Disability plans do not cover long-term care costs. Long-term Disability plans usually replace part of your lost income, which you will need when paying every day expenses. Disability plans are not designed to pay for the expenses of long term care services. Long-term Care Insurance can help guard your personal and financial security by providing benefits that help pay for a variety of long-term care services in a wide range of settings.
7. Why shouldn't I just invest my money rather than pay for long-term care insurance?
Long-term care insurance is a financial planning tool and actually offers protection for your investments. LTC insurance not only protects your investments and your family assets, but also provides you and your family with invaluable peace of mind. You will be able to receive the type of care you want, when you need it. You already have insurance to protect your home and your automobile. Your risk of a catastrophic homeowner's claim is 1 in 1200; catastrophic automobile claim is only 1 in 240. However, your chances of utilizing your long-term care insurance is 1 in 2 (50%). That's why it is important to have long term care insurance, because the chances of your needing it are so high. Long-term care is the embodiment of prudent planning because it serves as a shield to protect your investments from the skyrocketing costs of long-term care. One long-term, debilitating illness can wipe out a large part of your assets! (As of 2008, one-year of long-term care services can cost $40,000-$80,000.)
Do you have questions about long-term care, Medicare, Medicare supplements or nursing home costs or don't know where to turn?
E-mail us with your questions and one of our staff will respond within 24 hours. Our email address is quotes@c-hall.com.