When it comes to Long-Term Care For Beginners, there are a lot of things to think about. What type of long-term care insurance do you need? Is a life insurance policy the right investment for you? How about disability insurance – is that something you should consider? In this blog post, we will break down all of the different types of long-term care products available and help you figure out which ones are right for you.
What is Long-Term Care Insurance?
This is a type of policy that helps to cover the costs of long-term care services. These services can include anything from in-home care and assisted living, to nursing home care and hospice. Long-term care insurance can help to ease the financial burden on you and your family if you ever need to use these types of services.
Why is it Worth it?
Long-term care insurance steps in if you develop a health condition that requires you to receive care and supervision. This could mean home health care, nursing home care, or personal or adult day care. Many people mistakenly believe that Medicare or Medicaid would cover their care expenses, but this is often not the case. Without long-term care insurance in place, you may burn through your life savings or have no choice but to rely on a family member for care. This is worth it because it protects your assets, spares your family from financial and emotional stress, and puts you in control of your health decisions.
Do You Need Long-Term Care Insurance?
There is no way to know for certain if you will someday require long-term care either in your home or in a specialized facility. But it’s likely when you consider that people are living longer than ever and that the U.S. Department of Health and Human Services reports that 69% of people will use long-term care services at some point.¹ Many people find that its worth it because it offers peace of mind knowing that they won’t drain their assets or put undue pressure on family members.
What Are My Options?
There are three main options when it comes to long-term care coverage. They are:
- Traditional long-term care insurance: Also known as standalone long-term care insurance, traditional policies exclusively cover long-term care expenses in your home or a facility.
- Hybrid long-term care insurance: Also known as linked benefits or combo policies pair long-term care with life insurance or an annuity. A hybrid policy provides coverage for both extended care in your home or a facility along with a death benefit. If you never need long-term care, your loved ones would benefit from a life insurance payout after you pass away. Hybrid policies have become increasingly popular in recent years.
- Life insurance with a long-term care rider: Some life insurance policies let you add on additional coverage for long-term care via a rider. A policy rider lets you use some of the life insurance policy’s death benefit to pay for long-term care needs while you’re still alive.
Benefits it Covers
Long-term care insurance typically covers a comprehensive array of care in either your home or at a specialized facility. The exact type of covered varies by policy, but it often includes:
- Home health care such as skilled in-home nursing care; occupational, speech, physical, and rehabilitation therapy; and help with activities of daily living like bathing and eating. Some policies may also include homemaker services like meal preparation and house cleaning services.
- Respite care provides temporary care at home, adult day care, or nursing home. It’s meant to relieve a primary caregiver of responsibilities for a span of a few weeks per year.
- Adult daycare centers
- Assisted living facilities
- Nursing homes
- Alzheimer’s special care facilities
A few long-term care insurance policies also cover short-term hospice care. Hospice care helps manage the physical pain and emotional and spiritual needs of people facing a terminal illness. Hospice care, however, is one form of care that Medicare usually covers for people with a life expectancy of six months or less, so it’s often not covered by long-term care insurance.
Long-term care insurance typically doesn’t cover care provided by family members. It also usually doesn’t cover medical care costs—those are typically covered by private health insurance and/or Medicare.
What Are The Costs?
The cost of long-term care insurance depends on several factors. They include:
- Your age. You’ll typically get a better rate the younger you are. This is why professionals recommend that you start shopping for long-term care in your 40s or 50s.
- Your health. People with better health generally pay less than people with health challenges.
- The benefits you choose. This can include The maximum amount the policy pays each year or the maximum number of days the policy covers. It can also be any additional coverages or riders you add to the policy, including options for couples to pool their coverage or inflation options designed to help coverage grow over time.
The U.S. Department of Health and Human Services reports that 69% of people will use long-term care services at some point.¹
Unfortunately, this care does not come cheap. Consider the national median costs for long-term care services²:
- $255 a day(or $7,756 per month) for a semi-private room in a nursing home
- $290 a day (or $8,821 per month) for a private room in a nursing home
- $141 a day (or $4,300 per month) in an assisted living facility
- $24 an hour for a health aide
- $23.50 an hour for homemaker services
- $74 per day for services in an adult day health care center
The cost of long-term care map below shows the median costs for home health aide care and private room nursing home care. As you can see, costs can vary considerably depending on where you live. Give us a call to discuss costs.