Long-Term Care Insurance
Financing long-term care is a pressing issue that you can’t just sweep under the rug. It’s a reality you need to face head on or else you’ll end up exhausting your retirement savings or worse, you’ll become a financial liability to your family.
Getting long-term care insurance is wise since it is designed to help people who can no longer take care of themselves due to old age, illness or injury to fund their care expenses. Unfortunately, many Americans look away from long-term care insurance because of misconceptions surrounding it plus their false sense of security on long-term care.
To clear these misconceptions, here are facts about long-term care insurance that everyone should know.
Long-term care insurance is not just for old people.
Many individuals think that they will not need coverage because they are young and healthy. Contrary to popular belief, younger individuals will also require long-term care. In fact, 41% of Americans below 65 years old will need long-term care because of a chronic illness, injury or chronic condition.
No one can tell what can happen a few years from now so even if you’re young and healthy today, there’s still a possibility that you’ll need long term care that comes with a high price tag.
Pays for long term care bill not covered by Medicare and Medicaid
One of the biggest myths that people still believe in is that Medicare and Medicaid will pay for their bills. The truth is, Medicare doesn’t generally pay for long term care. It does pay for skilled care in a nursing home but only up to 100 days and it should be following a hospital stay for a related condition.
Medicaid pays for long term care but only if you have low income and assets. But take note that the monthly income limitation varies from one state to another. Generally, your monthly income should be $2,250 and below to become eligible for Medicaid benefits.
I can save on long-term care insurance premiums.
Buying long-term care insurance can be affordable. Your premiums are lower when you buy coverage when you’re young and healthy. Companies give health discounts to individuals who buy coverage early because they are not at risk of requiring long-term care.
A 55-year old male who will buy a policy with a daily maximum coverage of $200 and benefit period of 2 years has an annual premium estimate of $1,593.90. A 55-year old woman buying a policy with the same features would pay an average of $2,070 annually. As for a couple both age 55 buying the same policy has an annual premium estimate of $1,242 each.
Long-term care insurance is not as costly as what everyone thinks. But you need to be smart on deciding when to get one to save on premiums.
Insuring myself means insuring the people I care about.
Getting a long-term care policy is not limited to insuring your assets but as well as the people you love. Around 65% of older adults who need care rely on their family and friends. This is becoming the norm nowadays but it doesn’t mean follow that it’s the best way to handle long-term care.
Family caregivers can’t continue taking care of an aging loved one since they have other things to attend to like their job, taking care of their children, chores and planning for their future. But since they have no choice about providing care, they continue to do so and 70% of them suffer difficulties in their work because of their dual roles.
Many caregivers also experience financial strains such as cutting back their working hours, taking unpaid leave and spending out-of-pocket family care giving expenses.
By insuring yourself, you’re also protecting your loved ones from the emotional, physical and financial toll of family care giving.
It’s not a nursing home insurance
Long-term care insurance pays for different types of long-term care facilities and services, not just nursing homes. It pays for assisted living facilities, adult day care, homemaker services and others.
According to ALTCP’s long term care cost, the average annual rates for long-term care facilities are as follows:
Assisted living facility – $46,350
Adult day care – $18,746
Homemaker services – $49, 372
Homemaker health aide – $50,668
This policy is perfect for 77% of older adults who prefer to receive care at home. They can use their policy to modify their homes and make it safer for them to age in place. Some of these home modifications are:
- Bed rails
- Grab bars
- Outdoor ramps
- Updating flooring
- Improving lighting
- Security cameras
- Smoke alarms
Delaying getting long-term care insurance has consequences
Putting off buying a long-term care policy is too risky. You might end up facing higher premiums or worse you’ll be denied of coverage because you’re too old and too risky to insure or you have a pre-existing condition. In fact, 45% of applicants who are 70-79 years old are denied of coverage because of health issues.
I can still get coverage even if I have a pre-existing condition
Don’t count yourself out yet if you have a pre-existing condition because it’s still possible to get a long-term care policy even if you’re not 100% healthy.
Since not all long-term care insurance companies are the same. They look at health conditions differently and they follow their own set of underwriting guidelines. One company might reject your application because of your pre-existing condition but another company might approve it. The key is working with a professional that works with multiple companies and can help you find a company that offers the best chances of accepting your application.
Here are the most common pre-existing conditions accepted my carriers:
- High blood pressure – Carriers will approve your application if you have high blood pressure and you didn’t suffer from an attack for at least one year.
- High cholesterol – If you’ve managed your high cholesterol for a year, carriers will provide you with coverage.
- Diabetes – People with Type II Diabetes or those who can produce insulin but the body is resistant to moving sugar out of the body and is inefficient can be provided with coverage as long as they are taking medication to control their condition.
But those with Type I Diabetes or people who cannot produce insulin to maintain normal glucose levels will be denied even if they are taking medications.
- Tobacco use – You can still get long-term care insurance even if you’re a smoker. However, your chance of getting affordable premiums decrease if you smoke a lot or you’ll be denied of coverage.
If you’re a smoker and you have other health conditions, chances are your application will be denied.