What is Long Term Care Insurance? – Your Guide to Long Term Care Insurance
What is long term care insurance? Long-term care refers to personal care that may be needed if you are unable to care for yourself due to a disability, cognitive impairment, or illness. While this type of care usually doesn’t improve your medical condition, it does allow you to maintain your life by ensuring you have the help you need with daily routine activities. Long-term care services may be available at your home, an assisted living facility, hospice, nursing home, or an adult day care center. This type of care can include skilled care and personal care. Long-term care can be very expensive, and the cost will depend on where you receive the care, the type of medical professionals providing that care, the type of care needed, and the amount of care you need.
Is Long Term Care Insurance Right for You?
How do you decide if long-term care insurance is right for you? With this type of insurance, your assets are protected against the huge expense of extended long-term care. However, paying for this insurance generally only makes sense if you have more assets than just a home, vehicle, and a bit of cash. If you already have a tough time paying for monthly expenses, this type of insurance may not be right for you.
To determine if long-term care insurance is the right choice for you, consider your finances, personal risk factors, and the alternatives available. When thinking about your finances, think about your current income, whether you’ll be able to afford the policy in the future, and the overall cost of the policy. You also need to consider your personal risk factors, such as your life expectancy, your current family situation, and your family health history.
Services Generally Covered
What services are usually covered by a long-term care insurance policy? Your policy may pay for the following types of care:
- Assisted living care in an assisted living home that is licensed
- Adult day care in a center that has a license. Some adult day care services may include:
o Personal supervision
o Nursing care
o Social activities
o Therapeutic care
o Educational activities
o Nursing home care in a nursing home that is licensed
o Home health care provided by a home health agency that is licensed.
o Other services may be included in your policy, such as
– Care after a stay in the hospital
– Caregiver training for members of your family
– Respite care
– Hospice care
– Help with regular household tasks
Factors that Determine Your Rates
The rates you’ll pay for a long-term care insurance policy can vary greatly. Some of the factors insurance companies use to determine your rates include:
- Your Local Area – The cost of long-term care may vary from place to place, so your local area can affect your premium.
- Age – You will generally enjoy lower premiums if you’re younger.
- Elimination Period – The longer you’re able to pay for expenses before you have to use the policy benefits, the lower the premium.
- Health – When you purchase your policy, your current health will affect your rates. If you have any health problems, you can expect a higher premium.
- Duration and Benefit Amount – Expect to pay higher rates for a policies that have longer payment durations and higher benefit amounts.
Now that you know the answer to the question, “what is long term care insurance?” you have the information you need to decide if this is a policy you need. If you do decide to purchase this type of insurance, make sure you carefully consider your options, check the benefits available, and shop around to find a reasonable price.
Bill Kinder @BKAssocAdvisors
Bill Kinder is the President and Chartered Financial Consultant with Bill Kinder & Associates. A company that helps people from all walks of life and income levels to position & manage their money wisely, minimize their taxes owed, protect their assets and plan for a comfortable retirement. Bill has been in business for over 35 years, holds a BS degree, plus a Chartered Life Underwriter and Chartered Financial Consultant certifications, as well as the Million Dollar Round Table’s “Top of the Table” honor. Follow him @BKAssocAdvisors or if you would like to ask him a question, send it to firstname.lastname@example.org. If you’d like a FREE ‘WISE Money’ Consultation, call him at (304) 250-0250.
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