Long Term Care Insurance


Written by

Norine Wong

Home care and nursing home care are dizzyingly expensive. But how on earth can you put away enough money to pay for them? One answer is Long Term Care Insurance. This is a product that most people have never heard of, which is not surprising considering it is a product that addresses something we never think about in advance. Long Term Care insurance is designed to cover expenses incurred by illness and infirmity in old age which is not covered by medicare. Because it helps to defray those costs, it provides us a means to choose a lifestyle of choice as we age and should we require caregiving support.

It may be too late to purchase Long Term Care Insurance for your parents, but it is a product you should consider purchasing for yourself so that there is money put aside for your care when you grow old.

It may be possible in some cases to purchase this insurance for a parent. If for example they are still relatively young and functional, and are expected to live for another decade or two. But insurance plans are always evolving, so you have to talk to a broker about this. There were more stand alone long term care insurance options before, but now many of them are combined with life insurance.  Cost varies depending on health status, age and special riders. Some of the things to look for when shopping for a long term care insurance are elimination periods, some run between a 120 days to a 150 days. (I paid for an elimination period of 60 days as an average length of stay for short term rehab is 6 to 8 weeks, so I would like for my long term care insurance to start when my Medicare coverage ends if I need continued care at a non-SNF level).

The average length of life once a long term care insurance is initiated was 3 years, and now it is 5 years. There are no longer long term care insurance with lifetime benefits.

It is also important to understand what services your long term care insurance covers and align it with how you would like to live out the rest of your life.  Some policies only cover placement in a long term care facility so if you wanted to live in your own residence with private duty assistance, this policy would not fulfill this option.  One would need to look for a plan that would allow you to either purchase private duty services to utilize in your own residence, or cover one’s stay in an alternative long term care facility.

Another important rider option to look into is an inflation rider that would grow with you as you age, as the cost of care will continue to rise over time. (I started with coverage of $8000/month, and over the years it has grown with the market’s cost of care to $14,000/month.

If you pay for your premium on an annual basis, you may be able to save on monthly and quarterly admin fees.

Long term care insurance gives us options and choices in how we would like to live out our lives.

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