Basics of Long Term Coverage

Posted by on Feb 22, 2017 in Insurance, Life | Comments Off on Basics of Long Term Coverage

beachBefore making a decision about long-term care insurance (LTCI), it helps to fully understand what it is and how it works. Here’s a general overview.

What is long-term care insurance?
This type of insurance addresses extended, hands-on assistance that’s needed due to a prolonged disability or long-term illness or cognitive impairment. Each LTCI policy will define its benefit triggers, but individuals generally qualify for use when a health professional certifies that you require help with at least two daily activities, such as dressing, eating or bathing.

What can it cover?
Most comprehensive long-term care policies include common services like home care, assisted living, adult day care and nursing home stays. But they may limit you to licensed professionals and certified home care agencies. Read over the types of facilities, services and programs covered by each policy you’re considering.

Why do individuals choose this type of insurance?
According to the U.S. Department of Health and Human Services, nearly 70 percent of 65-year-olds will need long-term care in their lifetime. The costs involved with this kind of special attention are steep. According to median monthly costs nationwide, an assisted living facility costs $3,628 a month and a private room in a nursing home is approximately $7,700 a month. Long-term care insurance can help shoulder some of the financial burden.

When’s a good time to start thinking about LTCI?
Many industry experts suggest giving this sensitive topic serious thought in your early 50s. Purchasing a plan when you’re younger, say at the age of 55 instead of 70, can lead to significant annual rate differences. And there are alternatives to long-term care insurance, including contributing the maximum to a health savings account, buying short-term care insurance or a life/long-term care insurance hybrid, or tapping into home equity.

Consider your personal health risks and financial situation first, and then talk to a trusted professional to come to a thoughtful decision.