Answering Questions About Long-term Care Insurance

Aging isn’t something we like to think about. No matter how much long-term planning we do, we can’t predict what will happen to our health in the future. Most seniors—that is more than 70 percent of people over the age of 65—will need long-term care services at least once. 

The earlier you plan how you’ll pay for care, the more prepared you’ll be when the time comes. More than 86 percent of assisted living residents pay for their room and board out of pocket or through private insurance. Medicare doesn’t pay for assistance with activities of daily living. Read more about how long-term care insurance can help you pay for future care.

What Does Long-Term Insurance Cover?

Long-term care insurance pays for services that assist with activities of daily living, like walking, bathing and eating. You can use long-term care insurance to pay for in-home care, as well as room and board at assisted living or skilled care facilities.

You may initiate long-term care coverage when you can no longer do two or more activities of daily living, you experience cognitive impairment, or your doctor deems care necessary. What triggers the coverage depends on the policy. 

Most long-term care insurance options don’t provide benefits for mental disorders, Alzheimer’s disease or self-inflicted injuries.

When Should I Get Long-Term Care Insurance?

You can purchase long-term care insurance at any age. The younger you are, the less expensive your premiums will be. You should consider purchasing long-term care insurance in your mid-50s—at least by age 60. 

Premiums will increase over time. Make sure you choose a policy that you’ll be able to afford in the future, even if the premium goes up. 

You should obtain long-term care insurance before you need care. If you develop a serious health condition or already receive personal care, you may not qualify for long-term care insurance. However, you may be able to purchase limited coverage at a much higher rate.

What Should I Know Before Buying Long-Term Care Insurance? 

There are several factors to consider before you purchase long-term care insurance. The costs, benefits and length of coverage vary, as there isn’t a standard long-term care policy. You’ll want to compare long-term care insurance options to find coverage at a premium you can afford.  

Cost

Long-term care insurance costs can be steep, but they are often less expensive than the cost of care. If you have assets and an income but don’t want to use the majority of your personal resources to pay for care, long-term care insurance is worth it. This is especially true if you want to leave any assets to your heirs. 

Waiting Period

Most policies have a waiting period in which you have to pay for care before your coverage starts. Depending on your policy, you could be paying anywhere from 20 to 100 days of care out of pocket. 

Reimbursement Limit

The benefits of long-term care insurance have limits. You’ll only be able to receive a certain amount each day to pay for personal care. There may be a limit on how long your insurance will pay for care. Some policies may only reimburse you for up to five years, while others may continue for your lifetime. 

Riders 

Of the 8 million Americans with some form of long-term care insurance, the American Association of Long-Term Care Insurance states that 85 percent chose hybrid coverage in 2018. A hybrid policy often combines life insurance with long-term care insurance. Your insurer may allow you to add a rider for long-term care to your policy. 

In many cases, you and your spouse can purchase shared-care riders as well, which let you use your spouse’s benefits if you exhaust your own. Shared-care riders allow you to access your spouse’s benefits even after death. Adding a rider to your policy may increase your premium. 

Assisted Living Communities 

Before you move into an assisted living community, you’ll want to check that the facility accepts your insurance. Assisted living staff will be able to provide you with the documentation you need to bill your insurance company.

Are you planning to pay for care with long-term care insurance? 

Contact Culpepper Place in Olive Branch, MS. We can discuss payment options and help you start planning for long-term care. Read our article “What Is Long-term Care Insurance & Do I Need It?” for more information about qualifying for long-term care insurance.