What is Long-Term Care?
Long-term care is the kind of help you need if you are unable to care
for yourself because of a lengthy illness or disability. It refers to
care provided to you at home, in your community, in a nursing home or
other residential setting. It can range from help with routine daily
activities like eating or dressing to around-the-clock care by
skilled medical personnel.
Preparation is the key to financial Security!
Long-term care is a problem that affects not only the patient, but
the patient's entire family. Often people don't even begin to plan
for long-term care until a need arises. Long-term care needs can
occur at any age. Over 40% of the patients currently receiving
long-term care are under the age of 65. Most of this care is
community and home based. A long-term care policy can prevent work
interruptions to care for a disabled or aging family member and may
help to avoid draining your financial resources at the expense of
your standard of living.
Have you overlooked one of your greatest risks?
Most of us plan carefully for retirement but completely overlook one
of the greatest risks we face as we get older, the need for continued
care at home or the possibility of a prolonged stay in a nursing
home. The fact is, three out of five people over the age of 65 will
need some type of long-term care, including home care and community
care, at some time in their lives (*). Furthermore, two out of five
people will spend time in a nursing home (*). Faced with these
realities, we must plan for our continued financial security.
How costly are Long-Term Care services?
Today, the national average cost of nursing home care is $41,000 a
year (*). And home care averages $10,000 to $15,000 a year (*). At 5%
annual inflation, these costs will double in just 20 years. One
lengthy period of long-term care could wipe out everything you've
worked a lifetime to build.
Where will the money come from?
Essentially, there are three basic options:
Use your own resources. This option is available to those who have
the income and assets to pay for long-term care without seriously
affecting their financial well-being or independence.
Qualify for government assistance. If you meet federal and/or state
poverty levels for both income and assets, the government may pay
your long-term care bills. However, choices for the care you receive
may be limited.
Be insured. Long-Term Care Insurance can help you protect your assets
and your independence in the event you should face the overwhelming
expense of care at some point in the future.
Long-Term Care Insurance policies are marketed by 100's of different
companies and offer a variety of different benefits options. Shown
below are some of the benefit options one might find in a policy:
Care provided by family and friends at home
Care in your community
Lifetime Home and Community-Based Care
Nursing Home Care
Assisted Care Living Facilities
Adult Day Care
Alternate Plan of Care
Discounts for spouses and siblings
Preferred rates for good health and active lifestyles
Cost of Coverage
The insurance premiums you pay for long-term care coverage can vary
dramatically depending on:
It is in your best interest to comparison shop. Prices for the same
coverage can vary by hundreds of dollars, so it pays to shop around.
Ask your friends, check the yellow pages or call your state insurance
department. You can also check our Long-term Care Specialist page to
locate a company near you. This will give you an idea of price ranges
and tell you which companies or agents have the lowest prices. But
don't shop price alone.
The insurer you select should offer both fair prices and excellent
service. Quality personal service may cost a bit more, but provides
added conveniences, so talk to a number of insurers to get a feeling
for the quality of their service. Ask them what they would do to
lower your costs and check the financial ratings of the companies.
Sources: HIIAA, Long-Term Care: Knowing the Risk; Paying the
Price, 1997; Shelton Consultants, Long-Term Care Planning Guide, 1999