What Is Long-Term Care Insurance and Do You Need It?
Health Care can be one of the largest expenses in retirement and it's important to have a plan to address it.
It can be hard to imagine a day when you will need long-term care, but we all get older, accidents happen, and life can be really hard to predict. If you’re worried that you may need help affording hefty costs of long-term care one day, you may find that taking out a long-term care insurance policy gives you a lot of peace of mind.
What Is Long-Term Care Insurance?
Long-term care insurance is different from health insurance as it is specifically designed to cover long-term care services such as a home nurse or living in a care home while receiving medical care and treatment.
A long-term care insurance policy will reimburse you for all or a select amount of daily care services such as receiving assistance bathing, eating, or dressing. What long-term care looks like is different for everyone.
Essentially long-term care insurance steps in when you need either assistance or supervision completing what is known as the basic "activities of daily living" (ADLs). This support can involve help moving from one area of the home to the other or assistance with side effects of mental deterioration or cognitive impairment.
Long-term care doesn’t have to be long-term, it can end after a few months. Someone who broke a hip may just need assistance until the break heals whereas others may have lifelong care needs caused by incurable issues such as Alzheimer's Disease.
How Much Does Long-Term Care Insurance Cost?
How much a long-term care insurance policy costs will vary and usually depends on the following factors:
Your age when you buy the policy
Desired daily coverage amount
Desired amount of days or years to receive coverage
You can also choose to add optional benefits to enhance your policy, such as benefits that increase as time passes to account for inflation. If you are already in a poor state of health or are currently receiving long-term care services, it’s possible you won’t be able to qualify for long-term care insurance. It’s very common for individual policies to require medical underwriting. If you are in this situation, you may be able to purchase a limited amount of coverage or pay a higher-than-normal rate to receive coverage. If you have access to a group policy through a job, you may find that these policies don’t require medical underwriting.
What Do I Need to Know About Long-Term Care Insurance?
When it comes to long-term care insurance, it’s important to remember that these policies tend to have limits on how much they will pay and how long they will provide coverage for. You can purchase a policy that will pay your long-term care costs for as long as you live, but you can expect to pay much more for this type of policy.
It’s also important to note that insurance companies can raise the premium on your policy over time. It can be helpful to request information on the company's premium rate history to see how often they have increased premiums in the past.
Do I Need Long-Term Care Insurance?
It’s hard to say if you will ever need long-term care insurance (in an ideal world you won’t) since this need can be impacted by a variety of factors such as how long you live, your health history, and how much family support you need.
At Fortress Physicians we believe that when it comes to long-term care planning you need to have a plan in place. The potential cost could be enormous, so long-term care insurance is something worth considering.