What
every Adult Needs to Know About
Long Term Care Insurance
(Receive
a free copy of the ebook, "Insider's Guide to LTC"
when you request a )
What is Long
Term Care Insurance?
Long-term care insurance, abbreviated LTCi is a type of insurance
that will pay the bill if you should need extended care beyond what
your regular insurance or Medicare will provide. Commonly thought
of as "nursing home care," a LTCi policy is actually much more.
It will pay the nursing home bill, but can also pay a care-giver
who comes directly to your home. Assisted living facilities and
adult day care centers are usually covered as well.
Do I Still Need
my Health Insurance if I have LTCi?
Yes. LTCi will not pay a hospital for care you receive during an
illness, nor will it make payments to a doctor. Furthermore, doctor
bills accrued even in the nursing home are paid by your Medicare
or Major Medical Health Insurance. LTCi pays for any type of ongoing
care—custodial, Intermediate, or skilled care—that you require when
you are no longer able to perform the Activities of Daily Living
without assistance.
What are the
Activities of Daily Living?
The government defines six activities of daily living. They are
bathing, eating, dressing, transferring, toileting, and continence.
"Transferring" means getting out of your bed and into a wheelchair
or visa versa. It does not refer simply to an inability to walk
without a walker, or cane. In addition, a LTCi policy can be used
if the impairment is cognitive—such as dementia or Alzheimer's Disease.
What are the
risks of not having this insurance?
Six in every 10 adults age 65 or over will need extended care at
some point before they die. The national average for nursing home
care as of 2004 was $72,000 per year. Furthermore, Medicaid—the
primary payer of nursing home bills—requires a total spend-down
of your assets before you can receive pay via the government. Worse
yet, if you have a good life insurance policy you hope to leave
to your children, your hopes will be dashed as Medicaid will get
the bulk of your insurance upon your death.
Should I consider
buying an affordable long-term health care insurance policy?
If your assets are over $100,000, you need to protect them with
LTCi insurance. Some people whose assets are less but who have sufficient
retiree income also opt for the insurance because it gives them
freedom of choice and provides protection for a spouse who may still
be living in the home.
If your assets are over
1 million, you may not need to purchase LTCi as you have enough
money to pay for several years of care while allowing those at home
to continue to live comfortably. However, many people who have worked
all their lives to build up such a legacy have no desire to spend
it on health care. Since you have to take money out of retirement
instruments at age 70 1/2 anyway, why not plan to let the interest
from your assets pay your LTCi premium. That way, you have more
of your Social Security for yourself, satisfy the required minimum
distribution, and still have protection for a fraction of the cost
of paying for it yourself.
What should I
look for in a policy?
The surest way to know you have a policy that is right for you is
to contact a qualified, reputable agent and allow him/her to discuss
the details of a good policy. In spite of our American independent
spirit and our desire to "grab and go," LTCi is not a "do it yourself"
venture. Companies vary, language is not standardized, and that
which appears "cheap" may be missing important features that you
will wish you had. Talk to someone who is willing to meet with you
a couple of times to explain the detail, and then apply for the
coverage.
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