.jpg)
As adults grow older, their needs generally increase over time. Unfortunately, most traditional insurance plans will not cover the cost of long-term care. Similarly, Medicare only pays for these costs under very specific circumstances and for a short amount of time.
For these reasons, many families are investing in long-term care insurance (LTCI) to cover the costs of future care.
Long-term care insurance policies are specialized policies that cover long-term care needs, services, and support. Policies differ greatly, but they usually cover the costs of custodial and personal care.
These policies may cover the following services:
Some policies may cover a mix of these services. There are many different policies available. The policy you choose will determine how much is covered and how much you will still need to pay out of pocket.
LTCI is paid for every month through your insurance premium. Policyholders can choose from a range of plans. Some of these plans cover minimal services, and some cover a wide array of long-term care needs.
Aside from coverage, many other things will impact the cost. Some of these include the following:
According to the most recent Long-Term Care Insurance Price Index from the American Association for Long-Term Care Insurance (AALTI), a policy costs between $950 and $1500 yearly.
There are no age requirements to qualify for LTCI. Some people purchase a policy as young as 40 years old. However, the AARP recommends waiting a bit later to obtain coverage, between 60 and 65.
Waiting too long to buy a policy could mean that premiums are much higher. The only hard requirement for getting LTCI is that the beneficiary is in good health. If an elderly person already needs long-term care or help with daily activities, they will likely not be approved for a policy.
Purchasing an LTCI policy should not be a decision taken lightly. There are many things to take into account, including the cost, policy features, and timing.
Of course, cost should be something to think about when you are shopping for LTCI. You’ll want to consider your monthly premium, as well as your deductible — how much can you afford today, and how much will you be able to afford in the future?
The care allowance is another important consideration: It determines how much money the policy will pay out on a monthly or daily basis.
LTCI policies can be customized to fit each person’s needs. You need to consider many details and choose which features to include. For example, pay attention to the policy’s elimination period. The elimination period is the time that must pass from the time care is needed until the time you can be reimbursed.
You should also pay attention to the waiting period. This period governs how much time must pass between getting the policy and being eligible to receive benefits. Other policy features to consider include:
If you are new to LTCI, it’s a good idea to seek the help of a professional to sort out the features of different policies. An insurance professional can walk you through the features and help you find a plan that’s right for you.
One of the hardest decisions to make with LTCI is when to purchase it. If you purchase it too soon, you may pay premiums for years before care is needed. If you wait too long and the beneficiary is diagnosed with a disqualifying health condition, you may miss your chance of getting a policy at all.
If there is a history of certain illnesses in your family, it may be a good idea to explore policies sooner rather than later. Your doctor can also give you good signals on overall health, which can help inform your timing.
LTCI can be an important way to ensure your loved one has the care they need for the long term. Take the time to do your research and compare plans before making a decision.
You should also explore what other financial support or savings options you have. Securing an LTCI policy that fits the needs of you and your family can provide needed peace of mind now and well into the future.
