What Is Long-Term Care Insurance?
Long-term care services encompass a wide range of services for people with chronic physical illness, disability, or cognitive disorders. Long-term care is not medical care as you would receive in a hospital. Instead, it helps individuals maintain their level of activity and functionality. Typical long-term care services include assisted living services, respite care, home health care, adult day care and care in a nursing home.
Credit union members are eligible for special options that deliver protection and independence.
Why Long-Term Care Insurance Could Be Smart for You.
The day may come when you need long-term care services. It can be very expensive. Today, the median cost of care in a private nursing home tops $77,000† per year. And Medicare doesn't usually supplement that cost. Without a way to pay for the expenses associated with long-term care, you could lose your savings, and whatever financial security you planned on leaving your family.
- Do you have any relatives who've lived past the age of 80?
- If you needed to receive daily, long-term care, would you prefer to get it in your home?
- Would you object to living with one of your children and his or her family because they needed to take care of you?
- Would it be hard financially on your spouse or children if you had to pay for long-term care?
- Would it bother you if you had to receive care in a group facility rather than your own home, and you were not able to decide on your own?
FAQs
- What is long-term care?
-
Long-term care services encompass a wide range of services for people with chronic physical illness, disability, or cognitive disorders. Long-term care is not medical care as you would receive in a hospital. Instead, it helps individuals maintain their level of activity and functionality. Typical long-term care services include assisted living services, respite care, home health care, adult day care and care in a nursing home.
- How do I know if long-term care insurance is right for me?
-
For many people, long-term care insurance is a good way to help protect their savings. The type of policy you decide to buy will depend on your age, assets, health, retirement objectives and income.
- Why is planning for long-term care important?
-
No one wants to think of themselves needing any assistance with their daily activities, however it happens and it is important to be prepared so you do not place that entire burden on your loved ones.
Take a look at the chart and see the estimated years of LTC needed after age 65 provided by the American Association for Long-Term Care Insurance, 2011 LTCi Sourcebook.
- How much does nursing home care cost?
-
Nursing home care can be expensive, and costs are rising all the time. This chart shows current national average cost for one year of care.
Average Cost of Some Long-term Care Options
Private room in a residential facility $239/day or $87,235/year Semi-private room in a residential facility $214/day or $78,110/year Home health care nurse $21/hour Assisted Living Facility $3,477/month Source: MetLife Mature Market Institute, market survey of long-term care costs, October 2011
- How does long-term care insurance cover these costs?
-
In simple terms, long-term care insurance helps provide the dollars to pay for care that you would otherwise have to pay for yourself. Depending on the level of coverage you choose, the insurance will assume some or entire financial burden should you require care in a nursing home or assisted living facility, or if you require home health care. Having the money to help pay for care can give you and your family the control to decide what is best when it comes to providing for your care.
Long-term care insurance can help protect your savings and assets, preserve your independence, and help your spouse and children with your personal long-term care needs.
- What is the best age to start planning?
-
There is no magic age that is best for planning for long-term care. What we can tell you is the time to plan may be now, while your health may not be a barrier to obtain coverage. As you age the likelihood of you getting a medical condition that would make you uninsurable can increase.
- Can I be turned down for coverage?
-
Companies selling long-term care insurance will look at your current health and history before issuing a policy. Most companies ask simple questions about your health while others conduct more extensive underwriting, including examining your current medical records and asking for a statement about your health from your doctor.
Having certain conditions that are likely require a nursing home stay in the future may prevent you from obtaining long-term care insurance.
You must answer all the questions truthfully. If an insurance company later learns that you did not fully disclose your health status on your application it may rescind your policy.
- What if I have a pre-existing condition?
-
Usually, a long-term care insurance company will issue a policy to people who have health problems. But the company may not pay benefits for conditions related to those pre-existing conditions for a certain period of time after the effective date of the policy. If the company discovers you have not disclosed a pre-existing condition on your application it may refuse to pay for treatment related to that condition and perhaps terminate your coverage.
- Won’t Medicare or Medicaid cover my long-term care services?
-
Long-term care expenses are generally not covered by Medicare, Medicare Supplement (Medigap) or major medical insurance unless certain criteria are met. Medicare will cover the cost of some skilled nursing care in a nursing home on in your own home, but only after a hospital stay. For some people, Medicaid pays part of nursing home expenses. However, in order to receive Medicaid assistance, you must meet certain income requirements. This means you may have to spend your retirement savings and use up most of your assets on healthcare before Medicaid coverage begins.
- What kind of long-term care policies are available?
-
Long-term care insurance policies offer a variety of different benefits and coverage. Variables include benefit periods, elimination periods, maximum benefit payouts, and inflation protection. Choosing the right combination of benefits that suit your individual needs is an important part of the insurance buying process. We recommend seeking assistance from an experienced insurance professional.
- Can I choose my own facility and service providers?
-
Most policies provide care in any licensed facility, but most insurance companies limit the types of facilities where you can receive care. Your policy should define what type of facilities will be covered.
- How much coverage will I have?
-
The amount of coverage provided by your long-term care policy is expressed in terms of lifetime maximum benefit and is as daily or monthly benefit limits. The amount of coverage you get may also vary depending on the type of services you receive.
Most plans have a lifetime maximum benefit they will payout over the length of the policy duration. This benefit is defined either by a period of years or as a total dollar amount. A few plans offer unlimited lifetime benefits.