Though none of us want to think that we are going to be one that will need help during our last days on this earth, statistics tell us otherwise. Fortunately modern medicine has helped in adding years to our life expectancy...however for the majority, it comes with a cost. With an aging population of boomers, along with many states feeling the squeeze on budgets, Medicaid may not be a dependable option or one that will be esteemed. Some individuals feel they will self insure, while just a small percentage have chosen to purchase some type of coverage to pay for expenses incurred for home or facility care.
We talk to many people that say that they want nothing to do with nursing homes. A solution for many of our clients is to only purchase a policy that is going to pay for them at the comfort of their home, not a nursing home. Another advantage is that the costs associated for coverage like that is only a fraction of what some of the comprehensive plans cost.
Facility Based Care
With national costs for facility based care continuing to increase to $70,000+ per year, it wouldn't take long for the majority of folks to spend down their lifetime of savings in a matter of months. If you want the option of staying home or moving to a facility and want to protect your assets, then talk to us!
Short Term Care
How long should you get LTC coverage for? Many think that they won't need a policy that is going to last 5 years or even one of those lifetime policies. Not only do they think they'll need it, they don't want to pay for one that is going to last that long. For many of our clients, Short Term Care is the solution. This is also a great solution for folks that have been or would be denied coverage due to a few health challenges.
Why have premiums on long-term care become so expensive?
30 years ago when some of the first long-term insurance policies were being written, insurance companies never anticipated that today nearly 70% of individuals that reach the age 70 will need some type of extended care, either in their home or a facility. These same insurers estimated more policyholders would let their policies lapse meaning the insurance companies would be off the hook from paying large claims. One recommendation might be to hand pick your coverage. If you only want care at home, then look at coverage that overs only home care that may be only a fraction of the cost of traditional plans.
If I were to buy long-term care insurance, at what age should I purchase?
This is one of those million dollar questions. Here's the million dollar answer, or at least a couple hundred thousand dollar answer according to what a several year stay in a facility would charge per individual. Nothing more than the obvious here, either start at an earlier age and pay smaller premiums for a longer period, or start at a later age and pay larger premiums for a shorter period. One disadvantage of choosing the latter is that if one were to wait later in age to apply for coverage, then the likelihood of having a diagnosis that would not allow one to qualify for long-term care insurance increases. Another disadvantage is that many insurers are limiting some benefits on current policies for example lifetime benefits, so purchasing earlier before those benefits go away could be a recommendation.
I've been denied before trying to get long-term care, will I ever have a chance to reapply?
Many companies out there are tightening their belt with who they would like their prospective policyholders to be. Choosing younger and healthier individuals. Some companies have even gotten out of the market of selling long-term care insurance, who at one time were pretty big players in the long-term care market. What some companies have gone to is offering a more limited benefit policy that may be a good fit for an individual that has been turned down before. Another strategy would be to apply for a more limited benefit now, and apply for more coverage at a later date.