6 Considerations to Keep in Mind When Buying Long-Term Care Insurance

Adult children who want to make financially responsible decisions that will ensure the health, comfort and safety of their parents and themselves should take a close look at long-term care insurance.

What does long-term care insurance cover?

Typically, long-term care insurance covers personal care in an individual’s own home or one’s stay at an assisted living or memory care community. Long-term care insurance differs from traditional health insurance because it covers long-term needs and services designed for the later stages of life, usually after the age of 50.

With more than 100 different long-term care insurance companies to choose from, it can be overwhelming to decide on one option.

Here are 6 considerations to keep in mind when choosing long-term care insurance: 

1. Buying long-term care insurance in your mid-50s is the prime time. Most people start planning for long-term care between age 52 and 64. The key to getting the most out of this care insurance is to get it when you’re at your healthiest and can get the lowest premiums. Further, rates increase every year on your birthday, but the increase is only 1-2% in your 50s. Rates can increase by up to 8% annually once you reach your 60s.

2. Getting long-term care without insurance can be expensive. A 2016 survey on cost averages show prices quickly add up for long-term care of all varieties. Adult day care is $68 a day, home health aid services average $20 an hour, and assisted living communities can be about $3,600 a month on average. Plus higher quality options can easily exceed these averages.  Long-term care insurance can help defray these inevitable costs.

3. Talking to an insurance broker may be your best bet. Websites that are designed to sell you long-term care insurance will sometimes provide information that is biased toward their services. Brokers, however, are trained to compare a variety of insurance companies objectively within the context of your needs. For example, a broker might know which insurance companies charge smokers higher premiums than others. The American Association for Long-Term Care Insurance is a good place to start because they do not market or sell insurance. Professionals with a knowledge of varied insurance programs can help you find the plan that works best for your budget, coverage and health conditions.

4. Having long-term care insurance means having the option to select from higher quality assisted living and memory care options. If you need care in an assisted living community, Medicaid only covers expenses after you have spent down all of your personal financial assets. For this reason, some assisted living communities do not accept Medicaid patients. To enjoy a greater selection of upscale assisted living communities, it helps to have long-term care insurance – and it will ensure you protect your financial assets for your children.

5. Your current health affects your rates. Insurance companies can deny or require higher premiums to clients if they have AIDS, Alzheimer’s disease, Parkinson’s disease, multiple sclerosis or a history of strokes. That means it’s a good idea to lock in a plan when you are at your healthiest.

6. You can start making claims when you’re unable to perform certain activities of daily living. Most insurance companies allow you to file a claim when you cannot do two daily activities out of an official list. These activities can include getting dressed, bathing, getting in and out of bed or a chair, managing urinary incontinence or requiring assistance with eating and bathing. Long-term care insurance can be used to subsidize the costs when these effects of aging become a reality.

If you’re an adult child, you should not only talk to your loved one about their long-term insurance coverage, but also reflect on your own plan for paying for care in your later years. At The Preserve at Clearwater, we encourage our residents to take advantage of long-term care insurance for less financial stress and a high quality of living in your golden years. We are here to answer any questions you have about how to get the most out of your long-term care insurance plans.

Photo credit: Copyright: <a href='https://www.123rf.com/profile_feverpitched'>feverpitched / 123RF Stock Photo</a>

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