Understanding Long-Term Care Insurance

70% of Americans who reach the age of 65 will need long-term care at some point in their lives, which can be a major expense if one doesn't have insurance to help cover the cost. Many people don't think about Long-term care insurance until it's too late to find coverage. Just like everything else you plan for in life, it is important that you take the time to plan for the future by considering long-term care insurance. It's understandable that no one wants to think of themselves or their loved ones as being unable to take care of themselves and needing long term care. But you can't afford not to plan for this life event because the cost of care can be really expensive and could put a lot of strain on you and your loved ones as you try to figure out how to cover the cost of care.

What is Long-Term Care Insurance?

Long term care insurance is designed to help anyone afford the best care possible when you are the most vulnerable and also spare your family the financial strain of paying for these services out of pocket.

All or partial costs associated with assisted living, in home, or a stay at home nurse are covered by Long term care insurance.

Types of Long-Term Care Insurance.

There are mainly two types of long-term care insurance

1. Traditional Long-Term Care Insurance or Stand-Alone Policies: offer the most direct, affordable solution for paying for long term care expenses. Most policies reimburse the actual cost if:

• You require assistance with at least two of six activities of daily living: dressing, bathing, feeding, toileting, transferring and continence.

• You become cognitively impaired, for example, because of Alzheimer’s disease.

2. Hybrid Long-Term Care Insurance Plans: A hybrid long term care insurance plan combines two types of coverage under one policy.

• Life insurance

• A qualifying annuity with a Long-term Care Insurance rider.

Many may already have a permanent life insurance policy or an annuity, but they can actually be redesigned to add a Long-term Care Insurance rider. Components of stand-alone plans will be available in a rider package. Hybrid plans are growing rapidly in popularity recently after a long time of stand-alone plans purchases.

Benefits of Long-Term Care Insurance

1. Cost savings. The rates for premiums will be far less than if you would pay for care without insurance.

2. Increasing availability of care options such as in home or the elderly home.

3. Relieving family and friends from financial strains.

4. A constant care companion who is well trained and more effective in the field of care giving is offered.

How Long Do The Benefits Last?

Many long-term care insurance companies have a cap on how long or how much they are will to pay. This could range anywhere from 2-6 years with some insurance companies offering policies that will cover costs for as long as you live. This is one question you will need to ask when shopping for coverage to make sure you understand fully the terms of your policy.

Other Options.

You can consider adding an inflation protection rider. Such a rider increases your monthly benefit and helps you to keep up with your lifestyle. Be sure to enquire about the benefits of individual insurance policies since they may defer. Check out other sites that may have additional information too.

Factors to Consider When Planning for Your Long-Term Care Insurance Needs.

There are many factors to be considered when planning your long-term care needs.

1. Where you live matters as the cost of long-term care varies based on regions. Studies have shown that costs tend to be lower in the southeast and south-central states and higher in northwestern and midwestern parts of the U.S as well as in New England states.

2. You need to consider your age and health as these two factors will have an impact on your premiums. The older you are the more premiums you will pay and the likelihood of you developing a condition requiring long-term care. This might make it difficult for you to get coverage hence, it’s recommended you start shopping early.

3. Consider the monthly cost of other caregiving support options in your area. Keep the monthly median costs listed below in mind as you plan for your long-term care needs.
   

List of Companies Selling Long-Term Care Insurance

• GoldenCare

• Mutual of Omaha

• New York Life

• Pacific Life

• Lincoln Financial Group

• Brighthouse Financial

• Mass Mutual

• Northwestern Mutual Long Term Care

• Genworth Financial

• Transamerica Long Term Care

• John Hancock Long-Term Care Insurance

• Bankers Life and Casualty Long-Term Care Insurance

• Met Life Long-Term Care Insurance

As you work on your long-term financial plans, it is important to consider the potential cost of long-term care. Consult with your financial advisor and find out if it's time to buy long-term care insurance.

Additional Resources

Calculate how much long-term care insurance will cost in your area.

Cost of long-term care by state