Long Term Care
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Long Term Care Insurance
Long Term Care Insurance. If all you can spare is a couple of minutes, you need to know two things about long-term care insurance. First, with an increasing life expectancy in an aging population, long-term care has become a critical issue in the United States and one you shouldn't ignore. Second, the costs of long-term care can best be funded by insurance, not savings, since the sudden need for care can be financially devastating. Meaning, long-term care is a vital component to your financial and retirement planning.
You see, statistics show that fifty percent of all Americans may need long-term care services at some point. Presently, nursing home care averages forty thousand dollars per year, and home health care averages seventy-five dollars per day. With those figures in mind, it's no wonder that long-term care insurance has become so popular.
Many think Medicare will cover long-term care, but that government program is designed to cover only acute, short-term care. And to qualify for Medicaid, you cannot have more than one thousand dollars in assets; nor can disposal or transfer of your assets occur within thirty-six months prior to care.
So why should you buy a long-term care policy for yourself or your aging parents? One reason is to preserve the family estate in case a long illness requires extended time in a nursing home facility. Another is, you may wish to reduce the personal financial strain of family members. You may want to be in control of the type of long-term care you receive. Or, you simply want the kind of health care options that Medicaid cannot provide.
And how does long-term care insurance work? There is a base plan in which you essentially buy a dollars-per-day allowance for a specific type of coverage. For example, your local nursing home charges one hundred and twenty-five dollars per day for a private room, and home health care in your area is seventy-five dollars per day those are the dollar-amounts you would choose in coverage.
Of course, long-term care insurance comes in many forms, and with options and riders. Take the Benefit Increase Rider, for example. Say you are fifty-five and you are purchasing this coverage for yourself: so what will nursing care cost when you are eighty? This rider will protect against the inflation rate of institutional and home care up to five percent per year.
Other options include Comprehensive Coverage for home and community care services; Comprehensive Facility Care for assisted living, nursing home and residential care; return of premium in the event of death prior to the use of coverage; and multiple partner discounts.
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