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Long-term Care Insurance

Coverage for when you develop chronic conditions.

What Is Long-term Care Insurance?

If you develop a chronic illness or become disabled and can no longer care for yourself for an extended period of time, you’ll need long-term care services.

Families are often hit the hardest when a loved one requires Long Term Care (LTC). Caregivers can be dramatically impacted by having to take absences from work to accompany on doctor visits, possibly bathing, and even cooking meals. This disruption may cause resentment from both the caregiver and the person needing care.

Long Term Care insurance is purchased to protect both your relationships and your assets, should you require assistance later in life. 

What are Activities of Daily Living?

Of course, there are requirements for a person to meet in order to trigger this Long Term Care benefit from their policy. These triggers are referred to as Activities of Daily Living, ADLs for short. Most policies require that you need assistance with two or more ADLs from the following categories, before they will recognize the need for assistance. These below are known as basic ADLs:

  • eating
  • bathing (ability to clean oneself, shaving, brushing teeth, etc)
  • getting dressed (without struggling with buttons and zippers)
  • toileting
  • transferring (moving from bed to wheelchair)
  • continence (ability to control one’s bladder)

There is a second group of ADLs that include more complex tasks, and are known as instrumental ADLs:

  • Using a telephone
  • Managing medications
  • Preparing meals
  • Housekeeping
  • Managing personal finances
  • Shopping for groceries or clothes
  • Accessing transportation
  • Caring for pets
Who needs to Buy Long Term Care Insurance?

The first thing we recommend that people do if they are considering LTC insurance is to ask themselves a series of questions. Depending on the answers to these questions, will help you determine if you need to apply for a policy:

  • Do you have children who live close to you?
  • Will those children be willing and able to assist you with any of the ADLs listed above?
  • Do you have assets or investments that you want to protect from being spent on care? 
  • What is your family’s health history?

These are several important questions to jumpstart the conversation about LTC. Statistics show that 52% of people turning age 65 will need some long-term care services in their lifetime.

When do I Need to Buy Long Term Care Insurance?

The best answer for most people is in their mid-50’s. Why? Because adults are still healthy and can also afford it at that point.

You can receive discounts when applying for coverage, for example: couples sharing a policy will receive dramatically reduced rates. You can also receive favorable rates if you are in good health.

Here are some numbers based on a study performed by the American Association for Long-Term Care Insurance:

13.9%: Percentage of applicants ages 50-59 denied long-term care coverage due to health issues.

23%: Percentage of applicants ages 60-69 denied long-term care coverage due to health issues.

44.8%: Percentage of applicants ages 70-79 denied long-term care insurance due to health issues. 

Possible denial due to health is one reason to apply early. Another reason to purchase when you’re young is because the prices will be much more favorable. Waiting 5 or 10 years can significantly balloon the cost of insurance. 

Tip

It is common for siblings to go-in together to purchase long-term care for their parents. Parents many times do not want to be a burden on their kids.

Tools & Resources
Home Care
Home care is a simple phrase that encompasses a wide range of health and social services delivered at home to recovering, disabled, chronically ill or terminally ill persons. These services may include medical, nursing, social, or therapeutic treatment, assistance with essential activities of daily living, and even light household needs, such as shopping and cooking.

Generally, home care is appropriate whenever a person prefers to stay at home but needs ongoing care that cannot easily or effectively be provided solely by family and friends. More and more seniors, electing to live independent, non-institutionalized lives, are receiving home care services as their physical capabilities diminish. It’s also a popular choice for younger adults and children coping with chronic conditions or disabilities.

More info on the National Association for Home Care and Hospice

Assisted Living Facilities
Assisted living facilities are residential centers that provide continued care for those who want or need assistance performing certain daily living activities. These facilities, which are growing in popularity, generally offer personal services, 24-hour supervision and assistance, recreational activities and health-related services. They are designed to minimize the need to move around, and typically provide residents with more privacy and independence than a nursing home setting.

More info on The National Center for Assisted Living

Nursing Facilities
Nursing homes are dedicated facilities that provide comprehensive long-term care services. Though they are primarily for the elderly, nursing homes will provide care to people of all ages who are in need of extended long-term care services. The goal of care in a nursing home facility is to help individuals meet their daily physical, social, medical, and psychological needs in a controlled setting.

Nursing homes generally provide around-the-clock care and may offer medical, rehabilitative, personal and residential services. But all this care comes at a price: the median price for a private room in a nursing home is almost $84,000 a year, and that cost can be significantly more in certain regions.2 Prices and services often vary by location and facility, so it pays to shop around for the facility that meets your needs and budget.

More info on The American Health Care Association

Adult Day Care
Adult day care centers are community-based programs designed to meet the needs of functionally or cognitively impaired adults. These structured, comprehensive programs provide a variety of health, social, and other related support services in a protective setting during daytime hours.

Most programs operate during the week, and can be attended full or part time. Some programs offer services in the evenings and on weekends.

More info on The National Adult Day Services Association

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