Understanding Long Term Care Insurance

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As the American population ages it becomes more important for Americans to understand Long Term Care Insurance.  Long Term Care Insurance can provide coverage that will pay for your care if you are unable to care for yourself.  This coverage can keep you out of a nursing home, keep you from having to apply for Medicaid and can preserve your assets for future generations.  Here are some answers to common questions about this coverage to make your decision whether to buy it easier:

How does Coverage Work?

Long term care coverage is designed to pay the cost of services for what is known as the activities of daily living or ADLs.  ADLs include eating, dressing, moving from a chair to a bed and using the bathroom.  Some people with dementia or Alzheimer’s disease have additional needs beyond ADLs including supervision and reminders to do daily tasks such as bathing or taking their medication.

What Services Does It Cover?

When long term care insurance started about 20 years ago it only covered nursing home case.  Today, it has expanded.  Some policies include payments for respite care, adult foster home, adult day care, independent and assisted living facilities and hospice care.   Most policies include payments for in-home assistance with medical and housekeeping needs. For many people, the difference between staying at home or going to a nursing home is finding in-home assistance to meet ADLs and keep them safe.

What is a “Facility Daily Benefit”?

The Facility Daily Benefit is the highest amount your plan will pay for your care in if you live away from home and have institutional, long term care needs.  Plans and premiums vary in the amounts they pay for this benefit.  When choosing this amount, you want to look at how much it will cost per day for you stay in a nursing home in your area.  The average nursing home stay in the United States averages $7,500 per year and most seniors need this care for 3 to 5 years.   However, costs in your area might be much higher so it pays to make a few phone calls.

Is Coverage Right for You?

If you and your family have assets you would like to preserve from paying the cost your long term care, this coverage is vital for you.   Without this coverage, your legacy could easily be spent to pay for your care in the event of an illness or injury that prevents you from caring for yourself, even for a short period of time.  Other factors to consider when thinking about this coverage are:

• your desire to stay at home and your ability to afford expensive at-home care;
  
  


• the peace of mind you will have knowing you took steps to preserve your assets; and
  
  


• the multiple choices you will have in facilities in your area if you are able to pay privately with your long term care and do not have to depend on Medicaid.

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