What is Long Term Care Insurance?
Long term care insurance is a type of coverage available for people who potentially may require long term care. There are many types of long term care insurance (LTCi) available but as a standard it covers things that health insurance does not and it can also protect your assets. When you purchase an LTCi policy, it takes any possible burden off of your children to have to provide care for you. These policies typically cover such things as nursing homes and adult day care but can also cover things such as home care and assisted living. If you have an LTCi policy, the benefits will be triggered when you begin to need help with activities of daily living or have a severe cognitive impairment.
What You Must Know About Long Term Care Insurance
Long Term Care can happen to you. As we get older, all of us need help and a stroke, Alzheimer's or even a bad fall can leave you debilitated and unable to care for yourself. If you are over 65, the chances of someday needing Long Term Care is about 68%. And Long Term Care isn't just something that can happen in some distant old age... 37% of those receiving Long Term Care are under 65.
If you need Long Term Care, you will probably have to pay for it out of your own savings. If you're legally impoverished, government programs like Medicaid may cover your nursing home care. Medicare and virtually all health insurance programs will only cover LTC for a short time (less than 100 days) and then, only in part. For everything else, the bill will come to you.
Long Term Care is expensive. The average cost of a nursing home is currently over $70,000 per year. By 2030, it is estimated to rise to $190,600 per year. A quick note: If you live in New York City, you're living the future today. The average cost of a home care aid has spiked to $32.50 per hour. That adds up to thousands of dollars a month. Many people need round-the-clock care, a burden that friends and family usually can't bear, and let's face it, you probably don't want them to.
Long Term Care insurance can be an affordable alternative to using your savings to pay for care. Nevertheless it's not right for everyone. People that already have severe health conditions may not qualify for coverage, and if you are retired, with less than $70,000 in savings, purchasing insurance is probably not appropriate.
