It may be hard to imagine now, but chances are you’re going to need some help taking care of yourself later in life. The big question to ask yourself is: How will I pay for it?
Long-term care insurance is a smart way to prepare for these costs.
What is Long-Term Care?
Long-term care refers to a range of services and support for your personal care needs when you are no longer able to perform some or all necessary activities of daily living. This includes assistance with basic personal tasks of everyday life, like eating, bathing, continence, dressing and getting in and out of bed.
Health insurance does not cover long-term care, and Medicare won’t come to the rescue either. Medicare covers only limited amounts of home health care when you require skilled nursing or short nursing home stays or rehab. Neither regular health insurance nor Medicare pays for custodial care, which includes supervision and helps with day-to-day tasks.
To help protect your finances from assisted care expenses, considering long-term care costs is an essential part of any financial plan. This especially refers to those who are 50 and older, as most people buy their long-term care insurance in their mid-50s to mid-60s. Don't make the mistake of thinking you can wait until you need the care to purchase coverage, as that will not be an option. If you are already in poor health, you more than likely won’t qualify for long-term care insurance as most individual policies require medical underwriting. In some cases, you may be able to buy a limited amount of coverage, or coverage at a higher “non-standard” rate. Some group policies do not require underwriting.
Most policies will reimburse you for custodial care given in a variety of places, such as a nursing home, assisted living facility, an adult day care center, or your home.
Types of Long-Term Care Coverage
Comprehensive Long-Term Care Insurance
Benefits pay for service delivered in assisted living facilities, nursing facilities, adult day care centers, or at home. You may elect a decreased level of benefits for care received outside of a nursing home.
Facility-Only Long-Term Care Insurance
Covers care received in a licensed skilled nursing facility or assisted living facility, but does not cover care that takes places in an unlicensed facility or your home.
