We all grow old, and that is a fact of life. We will reach a point in our lives when we need someone to help take care of ourselves. These will usually happen when we approach sixty-five or older.
But how can we pay for it? One way to prepare for this eventuality is purchasing Long-Term Care Insurance.
What is LTC or Long-Term Care Insurance?
LTC is a kind of insurance coverage that allows for home health care, nursing home care, and adult or personal daycare for people ages sixty-five or older. It also includes people with disabling or chronic conditions that require constant supervision. It provides more options and flexibility than other public assistance programs, similar to Medicaid, which rarely covers LTC.
Key Points of LTC
- It is a kind of private insurance for anyone with access to it and who can afford it.
- It usually covers all aspects or parts of in-home care and assisted-living homes for people sixty-five years or older or with people with disabilities and chronic conditions that need care constantly.
- Coverage for full home care is one alternative.
- It covers expenses like a live-in or visiting caregiver, housekeeper, companion, private-duty nurse, or therapist up to seven days a week, twenty-four hours per day, up to the maximum of the policy benefit.
- It provides more alternatives and flexibility than Medicaid.
- Many LTCs cover only a specific dollar amount for each home-care visit or each day spent at a nursing facility.
- Always read the fine print thoroughly when selecting the appropriate LTC to meet the best basic needs.
Understanding LTC Further
Many people are not able to care for themselves anymore, and some do not have family members to help them, so instead they purchase long-term care insurance to cover out-of-pocket costs. Otherwise, the funds to pay strictly for this will quickly be depleted.
It is best to shop around LTCs between the ages of forty-five and fifty-five, and it is less expensive when purchased around these ages. The best one chosen will be part of an overall retirement plan to protect from the burdens and high costs of extended healthcare.
Why is it Important to Get LTC this 2024?
- Healthcare costs in the US are rising. Since medical expenses are increasing every year, LTC costs might be overwhelming. LTC offers a safety net, providing coverage for many services like assisted living facilities, in-home care, and nursing homes. By getting it now, we will be shielding ourselves from the potential financial upheaval that accompanies a need for extensive care in the future.
- Life expectancy is increasing. In today’s modern times, there are advancements in healthcare that are contributing to an increase in life expectancy. While longer lives are proof of medical progress, it also emphasizes the significance of planning for potential health issues later in life.
LTC becomes more valuable as we live longer because it helps manage the cost related to extended periods of care. By getting LTC now, we’re proactively addressing the potential need for care in later years. - The healthcare landscape is constantly evolving due to emerging new technologies and treatments. LTC is adapting to these changes, offering more extensive services and flexibility.
Investing in LTC today will ensure our benefits from the latest healthcare advancements and position us to access cutting-edge treatments and services. Staying ahead of these developments through LTC can greatly heighten the quality of care we will get in the future.
How LTC Works
When we decide to sign up for an LTC policy, the insurance agent will ask us to complete an application and answer health questions. We may have to show our medical records and be interviewed in person or by telephone.
We will then select our preferred amount of coverage. LTC insurance policies are usually capped by the amount paid during our lifetimes or the amount paid per day.
Upon approval of the policy issued and coverage, we will start paying the premiums. Most LTC policies still provide eligibility for benefits for two out of six “activities of daily living” or ADLs, on your own or suffer from cognitive impairment like dementia.
The ADLs are:
- Eating
- Dressing
- Bathing
- Getting on or off the toilet
- Getting in and out of a bed or chair
- Caring for incontinence
When we want to make a claim and need LTC, the insurance provider will examine our medical documents and might send a nurse to evaluate us. Before our claim will be approved, the insurance provider must approve our LTC plan.
Most LTC policies will let claimants pay out-of-pocket for a certain amount of time like thirty, sixty, or ninety days before the insurance provider will start reimbursing them for the care, which is called the “elimination period.”
The insurance provider will begin paying out money after we are eligible for benefits and generally after receiving paid care for some time. Most LTC policies will pay a daily limit for care until reaching the lifetime maximum.
Some insurance companies provide shared care alternatives for couples when the two of them buy policies. It will let you share the total coverage amount, so we can draw from the pool of benefits of our partners if you reach the policy’s limit.
How Much Does LTC Insurance Cost?
Particular LTC insurance rates will depend on various factors:
- Gender – Females typically pay more than males since they have a longer life expectancy and have more chances to make LTC insurance claims.
- Health and age – The older a person becomes, the more health issues come and the more reason to pay for the policy.
- Insurance provider – The rates for the same amount of coverage among insurance companies will differ, and it is for this reason we need to compare quotes from various providers to select the best and most affordable one.
- Marital status – Married people will pay lower premiums compared to singles.
- Amount of coverage – We will pay more for more coverage, like higher limits on the lifetime or daily benefits, cost of living alterations for protection against inflation, fewer restrictions on the type of care, and shorter elimination periods.
Things to Consider Before Buying LTC Insurance
- Our financial situation – We will need to take a close look at our assets and spending first. Some have sold their second home, gotten a reverse mortgage, or downsized from a family residence. Others have arranged a longevity fund to cover LTC and other related expenses.
- Review the full range of insurance alternatives – Talk to all insurance providers and financial advisors in our area and choose one who can put our overall financial plan into action.
- Few ways to pay for the policy – Having a healthcare savings account (available only to consumers in select health plans) can cover our premiums, tax-free. We can also exchange an existing life insurance policy for an LTC policy.
How to Save on LTC
- Tax advantages – LTC insurance has tax advantages once we itemize the deductions, particularly when we get older. Some state and federal taxes will allow us to count a portion of the entire LTC insurance premiums as tax-deductible medical expenses if they meet a particular threshold. The premium limits we can deduct will increase once we grow older.
- Couples buying individual policies – Couples can qualify for “shared care” after buying individual policies. If one uses up the pool of benefits, one can use the partner’s pool.
- Group policy – A group policy through our employer can be more affordable than an individual policy, especially if we have health issues.
- Buy the right one – As mentioned earlier, we will need to shop around various insurance providers for the appropriate LTC insurance, this way, we won’t pay for something we don’t need in the future. It is best to purchase LTC insurance between the ages of 45 and 55 as part of our overall retirement plan to protect our assets from the burdens and high costs of extended healthcare.
The Bottom Line
As we adapt to new challenges and opportunities this 2024, giving priority to LTC is a smart financial decision. By investing in it, we will not only safeguard our financial well-being, but we’re investing in a future where the health and welfare of our loved ones are protected. We must ensure a comfortable future today and take control of our financial destiny.
Email us at sales@ascend99.com if you’re interested or call our professional financial advisor at 312-469-0016.
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