When prioritizing financial needs, many Americans rank long-term care second after saving for retirement. Unfortunately, the majority do not take action. Most of them find it disagreeable to think about needing long-term care or hesitate to spend the money for coverage. Thus, many fail to plan for future care needs or wrongly assume that standard health or Medicare insurance policies will pay the medical expenses of long-term care services. Consequently, tens of thousands of Americans are penurious each year by long-term care costs because of failure to plan. Therefore, you must buy long-term care insurance from Thumann Insurance Agency.
Nevertheless, this article strives to expound more on long-term care insurance, how it works, and why you should purchase it.
What is Long-Term Care Insurance?
Long-term care insurance (LTCI) incorporates both medical and non-medical care. People require long-term care when an illness, serious injury, stroke, or chronic condition limits their ability to carry out basic daily duties and household chores. It is crucial to note that long-term care is not limited to the elderly.
Individuals of all ages require assistance from others to conduct day-to-day activities and responsibilities. Most individuals receiving long-term care benefits prefer to get it at home from family or friends.
Why should you buy it?
According to studies revised by the Urban Institute and the US Department of Health and Human Services, at age 65 and above, you will develop a disability and need some LTC services.
Long-term care insurance enables you to maintain control of your retirement money as well as protect your life savings. You can control and maintain your freedom and independence based on your residential area when the need for long-term care arises. Additionally, buying LTCI can relieve the burden from family, thereby leaving them with nothing to worry about the training and skills needed to assist you with your LTC needs.
Most people prefer receiving LTC at home for as long as possible or live in an assisted living arrangement instead of going into a nursing facility. Most policies with home care and assisted living benefits can pay for services received in these settings, like assistance with daily living activities, or if eligible, services such as cleaning, shopping, and cooking. Moreover, if it is determined that you need services provided by a licensed professional nurse or therapist you could also receive benefits to enhance your strength and mobility, as well as hearing and speech therapy.
Buying a long-term care insurance policy is not something you solely do for yourself. It involves family – giving your loved ones financial support, choice, and peace of mind when long-term care insurance is necessary. You can purchase directly from an insurance company or through an insurance agent. Also, before purchasing any insurance, talk to a trusted financial advisor at our personal finance website to help you budget for long-term care costs. Nevertheless, LTC policies are guaranteed renewable – they can be renewed year after year as long as you pay continuously. Furthermore, there is a money-back guarantee if you decide years later you do not want coverage.
Find the Right Policy for you and your family
The ideal policy for you and your family is where the benefit you may receive as well as the premium you are paying fits your financial plan.
·Most people consider nursing homes as the last option. If you agree with this, then ascertain that the policy you consider incorporates home, adult day care, and assisted living. Also, choose coverage at least equal to or not less than 80% of the nursing home care benefit (charges for a private room or semi-private room).
·Daily benefit plans vary while monthly benefits plans can go up to a certain figure. Ensure that you buy an inflation protection rider. The 5% compound rider works best at keeping your benefits in line with rising expenses. However, if you are age 75 or older when purchasing LTCI, the inflation rider is not recommended.
·If you purpose to fund part of your LTC and do not have prescription drug coverage, ensure you factor this in and other care-related expenses into your overall expenditure.
·Buy a policy that offers benefits for a minimum of two years. Long-term policies offer more security, but buy what you can afford.
·The elimination period or waiting period can save premium dollars. However, ensure you factor this expense into your budget as you will account for expenses during this period.
·Warranty that the insurance company you pick is financially sound. Check the rating services for reliable or better-rated services.
·Liaise with the Texas state’s insurance department for any complaint history or rate history increases.
Long-Term Care Coverage
Long-term care insurance pays for various types of care, including:
·Care in a nursing home or assisted living facility.
·Therapeutic care, supervision, nursing, and social and educational activities at an adult day care center.
·Nursing care and other in-home healthcare services.
·Other long-term care services. Some insurance policies cover hospice care, care after a hospital stay, caregiver training for family members, respite care, and help with household chores.
Long-term care insurance policies should cover all levels of care from custodial care to intermediate care to skilled care.
Cost of Long-Term Care Insurance
The potential cost of long-term care insurance is based on the type of care necessary, how long you need it, where you get it, and what type of medical professional or expert offers it. There are various ways through which you can pay for long-term care:
·Personal finance or savings.
·Payments or benefits from a life insurance policy or annuity. This may include a rider (added coverage) or an accelerated death benefit (the provision that allows you to receive your death benefit while still alive or if diagnosed with a serious health problem).
·Medicaid – federal and state assistance programs that pay healthcare and some LTC costs
for individuals with low incomes.
·Medicare – federal programs that pay healthcare for individuals over age 65 and those under age 65 with disabilities.
According to a 2019 price index from the American Association for LTCI, a single 55-year-old individual in good health purchasing new long-term care insurance coverage can expect to pay an average of $2050 a year for an LTC policy with an initial pool of benefits of $164000.
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Insurance companies cover benefits when you are unable to perform certain ADLs (Activities of Daily Living) such as eating meals, dressing, continence, using the bathroom, and moving from place to place, or you have a cerebral impairment.
Purchasing long-term care policy is not a decision to take lightly since it is one of the exorbitant types of coverages on the market. However, purchasing the ideal long-term care coverage that corresponds to your objectives and meets your financial plan will save you more in the long run – and here is how we can be of assistance.
What type of benefit amount do you prefer? Do you want life insurance and assisted living hybrid policy? At the Thumann Insurance Agency, we will ask about your necessities and scour the market for insurance premiums and insurance agencies that provide what you need. Contact us today for a free quote and consultation!