The Ins and Outs of Long Term Care Insurance
What You Need to Know about Planning for Your
Long Term Care Needs
Planning for retirement can be one of the most important and most overwhelming tasks to complete when securing your financial future. But it doesn’t have to be. It is important to educate yourself about retirement plan products and services. The more educated you are, the easier it is for you to pick the best options for you and your family.
As you or your loved ones prepare for retirement, Long Term Care Insurance may be necessary. Long Term Care covers a wide range of medical and support services for those with a degenerative condition (i.e. Parkinson’s, stroke, etc.), prolonged illness (cancer) or cognitive disorder (Alzheimer’s). Long Term Care also includes custodial services to aid with general frailties associated with old age. Whether or not you need any of this care now, there is a good chance you will in the future. It is a good idea to educate yourself now about Long Term Care Insurance so your future is protected.
While learning about Long Term Care insurance, it is important to know the facts. And the fact is…America is changing. There are more people over the age of 65 today than there are teenagers. Since 1900, the number of Americans 65 and older has doubled every 30 years. Because life expectancy has increased, more people need more care for longer periods of time, and most have set aside nothing to pay for it!
According to the American Health Care Association, 60% of Americans over the age of 65 will need some type of Long Term Care service in their lifetime. This is why Long Term Care Insurance is so important. Protecting yourself against unseen costs for future treatment and care is becoming more prevalent. The right policy can protect you and your loved ones from the financial and physical burden of Long Term Care.
There are many myths associated with Long Term Care. Many people assume that a family member or loved one will be able to take care of them should the need for long term care arise. However, families have fewer children and are more geographically spread out, making the probability of help very low. And if the children are nearby the burden still exists, especially if extensive amounts of time and effort are required.
Others assume that they will be able to afford future Long Term Care costs or they have the impression that government programs such as Medicare and Medicaid will shoulder the burden. In actuality, Nursing Homes in Northeast Ohio average $73,000 per year with costs projected to double in 10-15 years. Home Care can cost $16 per hour and places such as assisted living facilities average $36,000 per year. Paying for those costs out of pocket would be an insurmountable burden for almost any retiree.
Relying on Medicare is to rely on a false sense of security. Medicare will not cover all the costs associated with Long Term Care. It requires prior hospitalization of at least 3 days and only covers skilled care, which represents only 1% of needed care in Ohio.
Medicaid also offers a false sense of security. It is not an entitlement program. Medicaid is welfare. It will pay for your long-term care needs if and only if most of your assets have been exhausted. Using Medicaid leaves you with no assets to leave your children or spouse.
Long Term Care Insurance allows you to pay for all or part of your long term care needs while still maintaining the lifestyle you are accustomed to. However, it is important to have the right policy for you and your situation. When creating a Long Term Care policy with your financial advisor, you need to make sure your policy has accessibility, flexibility and reliability.
Accessibility is based on the loss of activities of daily living (ADLs) or cognitive impairment or medical necessity. A well planned Long Term Care Insurance policy will provide reasonable access to the money in your policy when you begin to experience any of the above. Each policy varies and will be tailored to your financial situation.
A well planned Long Term Care Insurance policy will also have Flexibility, allowing you options for Home Health Care, Assisted Living and Nursing Home Care. Additionally, your policy should have Reliability. It should be backed by the financial strength of an insurance company with at least 10 years of Long Term Care experience, high financial ratings and a commitment to the market.
Once you have the accessibility, reliability and flexibility you need for a solid Long Term Care Insurance policy, you should look at the types of benefits paid by your policy. The basic benefit design of a Long Term Care Insurance Policy includes either Daily or Monthly Benefit amounts. Your policy should insure either a daily or monthly amount covering what you will not be able to afford out of pocket when the time comes.
You should also look at the Benefit Period and Waiting Period when setting up your policy. Guaranteed Benefits can begin anywhere from one year to life. You will also have the option of shared benefits for couples. The Waiting Period for a policy can be either 30, 60 or 90 days depending on how quickly you will need the benefits for your particular financial situation.
There is a lot to consider when determining which type and how much Long Term Care Insurance you need for your retirement plan. The best way you can ensure the proper policy for you is to get educated on the topic and then contact a Long Term Care Agency like Goldish Financial. Together you can make the decisions that are best for you and ensure you a long worry-free retirement.