Long Term Care Insurance… Demystified

Posted by Matt Simon on Oct 25, 2009

One of the hottest topics in insurance continues to be Long Term Care insurance.  Too often, there are more questions than answers and there's a great deal of misunderstanding, confusion and conflicting information out there.  So, here are some basics to help you understand what Long Term Care insurance is... and what it's not.

First off, Long Term Care insurance is not just about paying for a nursing home stay.  Yes, that's a big, critical part of it, because statistics show that nearly 50% of Americans will spend time in a nursing home after age 65, and the annual cost is more than $40,000 per year on average.

But, more and more, professional long term care services are provided in patients' homes or in outpatient facilities - involving help with bathing and dressing on up to skilled nursing care.

And you don't have to be over 65 to need "long term care".  At least 1 in 5 Americans over age 50 will need long-term care services in the next 12 months.

Second, Long Term Care is not necessarily medical care but custodial care - meaning it provides you personal assistance with the activities of daily living.  The expense of this kind of care is generally not paid by health insurance.  There are really only 3 ways to pay for long-term custodial care - cash, welfare or Long Term Care insurance.

Third, Long Term Care insurance becomes much more expensive as you age.  Why?  Because the older you get before you buy it, the less time the insurance company expects to collect premium before you file a claim.  So, if you think Long Term Care insurance makes sense for you, check into it NOW.

Finally, Long Term Care insurance is generally a good idea only if you have assets to protect and the premium you'll pay for it will not significantly change your lifestyle.  Medicaid will kick in for impoverished people, but if you don't want to see everything you've worked for swallowed up by long term care expenses, then Long Term Care insurance is worth a look.

This explanation only scratches the surface, but hopefully that clears up some of the basics that most people ask about.

If you have questions or concerns about Long Term Care insurance, let us know... we're here to help!

 

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