Long Term Care Insurance – Although most of our focus is on assisting families with the funeral and burial process, and connecting families to available resources in their time of need, more and more families are asking for help providing care for their sick loved ones, before long. Funeral. Considerations are taken. This is especially true for “Sandwich Generation” caregivers. The “sandwich generation” is the name given to middle-aged men and women who are caught between caring for their young children and caring for their elderly and sick parents.
, Kim Parker, “The Sandwich Generation: Rising Financial Burdens for Middle-Aged Americans,” Pew Research: Social and Demographic Trends, January 30, 2013. These guardians often find themselves in a maze of questions related to nursing homes, community-based pensions, and nursing homes. Care. , and insurance coverage. The hope of this article is to reduce confusion and provide Jill Sandwich and others with answers to some of these questions. It strives to be a resource for families with a variety of topics and hopes to alleviate anxiety surrounding end-of-life issues.
Long Term Care Insurance
At its core, long-term care insurance is a way for seniors or families to pay for nursing home, assisted living and community care for retirement. This industry is relatively new and still growing, but has gained traction in recent years.
Chapter 3: Let’s Talk About Long Term Care Insurance
, Laura Santhanam, “Dealing with the Complexities of a Long-Term Care Insurance Policy,” PBS Newshour, January 9, 2015. This privately purchased insurance reduces the financial burden of paying for care when a loved one is unable to live at home any longer. With the annual cost of nursing home and assisted living averaging between $40,000 and $80,000 depending on the level of care needed, the cost of long-term care can be debilitating.
Many families find themselves turning to personal savings, pension savings and annuities to cover long-term care costs, and incurring personal debt to pay for a loved one’s care. While many seniors use Medicare services to help with health care costs, Medicare does not cover long-term care arrangements. Many seniors must apply for Medicaid or privately finance their long-term care housing. This is where long-term care insurance steps in to fill the coverage gap.
For the annual costs of care, you should purchase long-term care insurance. However, the complexities of long-term care insurance paint a different picture. Most of these insurance plans have a series of requirements that the insured must meet before the insurance begins to cover the costs. For example, the insured can experience “activities of daily living” where he or she needs help bathing, brushing his teeth, or using the bathroom, before the policy benefits kick in. Early onset dementia or Alzheimer’s disease should consider purchasing a policy.
Likewise, an individual who may not need to move to a facility full-time, but would prefer more supervision in their home, should consider long-term care insurance and whether its benefits will help cover daily nursing costs. Daily home health care costs an average of $45,000 per year, and again, unless a family is able to privately fund these costs, a long-term care insurance policy may be able to reimburse the family for all or part of the $45,000. .
Life Happens Pro
Families who are able to pay privately for a few months of long-term care should consider long-term care to pick up where their own finances left off. Many families find themselves able to pay for two or three months of care, but only a few go beyond that. With Medicare paying for none of this, and with Medicaid requiring income requirements before approving an insured, long-term care insurance can fill these gaps.
Perhaps most importantly, any senior who suffers from any type of chronic disease, or is diagnosed with a “fair-to-poor” outlook, should discuss long-term care with their loved ones. Consider Verna’s story. Verna was diagnosed with early-onset dementia after suffering a stroke. For a while, Verna was confident that she lived at home and needed minimal supervision. As her dementia progressed, Verna’s self-care declined to the point where she required nursing home care. When Verna entered the nursing home, she was 85 years old. Despite her diagnosis, her doctor deemed her healthy and predicted that she would live for at least another ten years. Annual nursing home costs of $45,000 for ten years could have easily wiped out her life savings and any retirement account she had left. Verna was grateful that her children chose to purchase long-term care insurance immediately after receiving the diagnosis, as it greatly eased the financial burden of paying for ten years of home care.
Verna’s example serves to underscore the importance of making long-term care decisions within a family discussion, whether immediately after diagnosis or while their body and mind are still relatively healthy. Although Verna may have initially been healthy enough to make the decision to purchase long-term care insurance, had she avoided the problem altogether, her children and family would have suffered far-reaching financial consequences from ten years of long-term care. It was left up to her family to decide whether to move to a different nursing home, or return to another level of care, depending on the resources available to the family.
Many local senior centers have information about applying for long-term care insurance. In addition, any AARP member can easily find resources and compare costs on its website or by calling 1-888-OUR-AARP. Often, military veterans can use VA hospitals and communities to determine what types of care are already covered by VA benefits and what additional policies to purchase. Many states also have government-supported programs that may be able to provide additional resources for long-term care insurance. Again, a good place to start is an area agency on aging or a local senior center to determine if the community has a link or list of resources available to the family.
Do You Need A Long Term Care Policy?
Applying for long-term care insurance is similar to applying for any insurance policy. Be prepared to answer standard questions about contact information and emergency contacts, as well as financial questions, health questions, and personal preference questions. For example, some insurance policies may not cover completely private rooms in nursing homes, but others may not. By asking the broker what specific services are covered, the family can ensure that their loved one’s preferences are taken into account.
This is perhaps the most difficult question to answer. As with funeral and burial considerations, costs vary by provider and state. When considering purchasing long-term care insurance, families should consider creating a list of ten caregiving facilities. When the family visits each facility, the family should take notes on what insurances are accepted, what services the insurance will cover, any accreditation the facility has, and whether the facility is a “right fit” for their loved one. In addition, the family must request a per diem rate of care, as many long-term care policies only cover after the insured has stayed in the facility for a certain number of days. With all of this in mind, a family should be able to not only narrow down the list of facilities they feel comfortable with, but also narrow down the long-term care insurance companies they want to look into.
Some insurance companies provide lists of state facilities that accept certain insurances. For example, United Policyholders in California has been able to create a database of insurance resources, costs, and programs available to citizens in that state. The previously mentioned AARP resources also allow consumers to make comparisons and obtain information about acceptable policies before visiting an assisted living facility or nursing home.
As with the previous section, the answer to this question is a very vague, “it depends.” Premium rates depend on the person’s age at the time of purchase, general health, and type of coverage required. Costs vary depending on insurance company and age at time of purchase. In 2008, the average annual cost of long-term care insurance for a forty-year-old was $2,050 and $3,109 for a sixty-year-old.
The Realities Of Long Term Care
, AARP “Long-Term Care Planning: Your Resource Guide” 2010. Compared to the $45,000 annual costs mentioned above, $2,050 and even $3,109 don’t seem like bad investments.
Shopping for long-term care insurance is very similar to shopping for other types of insurance in that it pays to shop around for the best rate and best comprehensive policy. As with auto insurance, a family should not be surprised if the primary insurance policy covers the loved one’s minimal expenses and the family has to dip into savings again. Likewise, a more comprehensive policy may have a higher annual premium, but may cover ninety percent of a loved one’s care. Any insurance agent or broker should be able to answer these types of questions for a family before purchasing an insurance policy.
Plus the financial pain and trauma of enrolling a loved one long term
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