You might not want to think about the high cost of long term care, but you probably should. According to the US Department of Health (HHS), nearly 70% of 65-year-olds can expect to receive some form of long-term care in their lifetime.
With such care averaging $229 a day for a private room in a nursing home, HHS says you can quickly run out of savings if you’re not prepared. This is where long term care insurance can come in handy. We’ll break it down so you can decide if this is the right type of policy for you or a member of your family.
What type of care does the insurance cover?
Long-term care insurance is designed to help pay for services that provide two types of support:
Babysitting: helps with personal daily tasks such as bathing, eating or going to the bathroom
Special treatment – assistance from a doctor such as a nurse or therapist.
Most people consider these types of services in a nursing home, but such care can also be provided in an adult daycare center, an assisted living facility, or even at home, according to the Insurance Information Institute. III).
WHY MEDICARE, PRIVATE INSURANCE IS NOT ENOUGH?
you haven’t considered long-term care insurance because you think you can take advantage of your employer’s health insurance plan or Medicare, you may not be able to cover the cost of the care leave.
This is because Medicare and most forms of private health insurance only cover short-term specialist care, according to HHS, and usually only under very specific conditions. And they usually don’t offer custody coverage.
HOW DOES LONG TERM NURSING INSURANCE WORK?
How can long term care insurance help close this gap?
Daily limits for life.
The policies are generally designed to reimburse you for eligible expenses with daily and lifetime maximums, says III.
Policies often have certain “triggers” that must be in place before they can provide coverage, says III. A common trigger is cognitive decline due to Alzheimer’s or Parkinson’s disease. Another reason could be the inability to perform two or three daily personal hygiene tasks due to illness.
There is usually also a waiting period before an insurance company starts paying benefits, says III. If you recover from your illness before the waiting period expires, the policy may not cover any expenses you incurred during the waiting period.
Duration of coverage.
The length of your insurance depends on the details of your policy. You can have insurance that offers two years of care or even life protection. The cost of a policy is generally lower for short-term coverage, says III.
The final cost of your policy will depend on these and other factors, such as: B. your age at the time of purchase. However, it is important to know that if you are already in poor health or are currently receiving long-term care, according to the HHS, you may not be eligible for the long-term care policy.
This is another great reason to consider long-term care insurance (or face the financial risks of healthcare costs) well before you need it.