Long-Term Care Insurance 101
Why is long-term care insurance worth it?
Do I need long-term care insurance?
There is no way to know for certain if you will someday require long-term care either in your home or in a specialized facility. But it’s likely when you consider that people are living longer than ever and that the U.S. Department of Health and Human Services reports that 69% of people will use long-term care services at some point.¹ Many people find long-term care insurance worth it because it offers peace of mind knowing that they won’t drain their assets or put undue pressure on family members.
What are my options for long-term care insurance?
What kind of care does long-term care insurance cover?
How much long-term care insurance do I need?
When should I buy long-term care insurance?
How much does long-term care cost?
While the cost of long-term care varies by facility and by where you live, it’s safe to say the cost is considerable. Long-term care costs range from $19,500 per year for adult day care to $102,200 per year for a private room in a nursing home.² This kind of expense can quickly deplete your nest egg, which is why long-term care insurance is such an important coverage to consider. Many people are surprised to learn that long-term care coverage costs less than they imagined. You may even be able to deduct the cost of long-term care insurance premiums from your state and federal taxes.
How much does long-term care insurance cost?
Where can you buy long-term care insurance?
There are three main options when it comes to getting a long-term care insurance quote and buying coverage. They include working with a licensed insurance professional, buying coverage through an employer-sponsored plan and buying coverage through an association or membership group like a trade association or alumni group. There are pros and cons to each of these three options.
How should I manage my long-term care insurance policy?
Because almost all long-term care policies are now hybrid policies that also include life insurance coverage, you will want to review your policy whenever you experience a major life change like a marriage, divorce or death in the family. It’s also a good idea to review your coverage once a year with a licensed insurance agent. This is especially true if your long-term care coverage includes a compound inflation rider or a purchase option.
When does a long-term care insurance policy start to pay for care?
You first need to meet the elimination period before your long-term care insurance policy starts to pay for care. The elimination period can be thought of as a deductible measured in time instead of money. A typical elimination period for a long-term care insurance policy is 90 days. Once that is met, you typically need to experience either severe cognitive impairment or be unable to perform two activities of daily living such as dressing or feeding yourself.
How do I make a long-term care insurance claim?
Real Life Story
Long-term care insurance relieved the financial burden after a health crisis.
“If we didn’t have this insurance, caring for Joe would have depleted all the savings we had,” Theresa says. “Now I’m not afraid of running of out money.”