Most people buy long-term care insurance in their 50s and early 60s. The cost goes up with age, but it's still affordable for many people over age 65. Once you hit the mid-70s, though, the cost of a good long-term care policy becomes very expensive, and it may be difficult to qualify for if you already have health problems.
Even if you're are in good health today, there's a good chance that you'll eventually need some type of long-term care, at least for awhile. By 2020, roughly 12 million people over the age of 65 will require some long-term care, according to a study by the U.S. Department of Health and Human Services.
But that only gives a general picture. The hard part is figuring out in advance whether you'll need a long period of close monitoring -- daily or even round-the-clock care -- that you'll have to pay for. Some 70 percent of the elderly don't pay for their care but get it exclusively from family and friends.
The odds of needing two years or more of extensive, paid care is not high. Long-term care insurance, then, is security against a small but nonetheless real possibility of a lengthy, expensive period of care.
If you are looking at a long term care policy, make sure it is considered "Tax Qualified." To be a tax qualified plan means that the basic plan design has the same four elements: benefit amount, benefit period, elimination period, inflation provision. The general advice is to purchase a "fat and short" plan, i.e. a greater daily benefit , with a shorter benefit period, because whatever daily benefit you don't use will remain in the benefit account to stretch out the benefit period. The policy definition of the Elimination Period is very important. A "calendar day" elimination period is one that you just have to wait that number of days before you are eligible for benefits. A "service day" elimination period means that you have to pay for that many days of care before you are eligible for benefits. If you only have care every other day, it will take you twice as long to be eligible for your benefits from a "service day" policy than from a "calendar day" policy. Depending upon your age,choosing the inflation increase option is crucial. The younger you are, the more you need inflation coverage. Do NOT skimp here! If you are considering a state Partnership policy, you will be required to purchase an appropriate inflation option for your age. Even though you might not live in Texas, check out the State of Texas website www.ownyourfuturetexas.org for an excellent interactive tool that can help you determine understand these options and what might be best for you. Then work with a specialist in long term care insurance, one who represents several different companies who can help you determine which company will best suit your needs.
What are the necessary components of long term care and what are the unneeded components?
After having my husband in the nursing home since Jan. I 'm very happy that we purchased the ins. many years ago. I also used it for the home health care. Right now I'm happy to have it as its very expensive and would soon deplete savings. Gives a little peace of mind for some help.
Hugs WhoCanIHelp
Hello richard.miller1, WhoCanIHelp, and Anonymous, We appreciate that you've taken the time to send us this feedback. It's very helpful for us to know how caregivers and the public are responding to the information and resources we offer on our website. I've passed on your comments to our editorial team for their consideration. If you'd like to view the Stephanie Miles' profile, you can do so here: ( http://www.caring.com/authors/stephanie-miles ). Thanks again for sharing! Emily | Community manager
No kidding about recycling old info! Comments from this article that appeared 3 years ago!?! And the criticisms from that time are the same now. This is not useful information.
Hi, Much of the information in this article is very outdated, particularly regarding the Partnership Act states. It is available in many more states than listed above. The link to the Author does not work, and hopefully someone on the Caring Staff will see this and follow-up on the needed changes. Thanks in advance!
Caring.com- This article appeared in my inbox this morning as a "new" article explaining long term care insurance. Checking the date of the comments confirmed that some of the information is very out of date. Just one example: nearly every state now offers the asset protection of LTC Partnership policies, not just the original four. Readers may want to check www.longtermcare.gov for more up-to-date information on planning for long term care costs. I have sold long term care insurance for 11 years. Readers may consider me biased, but the reason I sell long term care insurance is that neither of my parents had it, and caring for them was financially devastating. Had they had long term care insurance, Mom and Dad's quality of life during their last several years would have been improved immensely.
Great overview of things to consider with Long Term Care Insurance (LTCI). The one good thing about our recent economic downfall is those insurers who are still standing--the survivors--are a testament to long-term viability. However, they have been strained and are revisiting plans, premiums, coverages. When considering LTCI, explore which insurers will stand the test of time going forward. --Ask caregiving friends who have already collected on their premiums how their experience was. --Also, know that the average nursing home stay is less than 5 years. This means that it is less common for one to live in a nursing home for 10 or 20 years...although, it has happened. Consider this when buying a policy that covers you for so many years. --Finally, ask the LTCI representative to explain why his/her company is a better choice than the other company you're considering. Sometimes this provide you with information you didn't even consider. And if the rep. refuses to answer or feigns no knowledge of the other company...well, incorporate this lack of information in your decision. After paying premiums for many years, the last thing you need is another "too big too fail" debacle where your premiums are lost forever because the company no longer exists. To Caring.com Updated figures in this article and care option coverages would be most helpful as this topic is too important to ignore.
Ms. Miles....please call me. You need to read more, learn more about LTC insurance. If you are going to report to visitors to your website how to plan for the possible eventuality of needing care...you MUST become better informed. Shame on you for your flip comments about LTC insurance. Shame! I can tell you this...if you ever need care yourself.....your family will thank you for having a plan in place. Having money available to pay for quality care, choices, allowing your family to be care supervisors instead of care providers will endear you to them forever. Plan early, save, invest, insure....you just might live a long life.
Stephanie Miles is wrong!!!.....she wrote....needing long-term care from a paid provider. Long-term care insurance can pay for a nursing facility or home care, and many policies also cover assisted living, though no policy will pay the full cost of any of these. Say what?!? Of course it will it will pay for ALL LTC services if the daily/monthly benefits purchased are equal to or greater than the actual expense. C'mon, get the facts straight, will you? People usually pay premiums for 20 or 30 years before reaching an age when long-term care is likely. If, like most people, your parents never need or qualify for the policy's benefits, or they collect benefits for only a short time, those years of premiums will turn out to have been a wasted investment. For that reason, it's best to consider long-term care insurance as a "peace of mind" investment rather than as a sound financial one. Your whole website is devoted to caring for the elderly...people get old, they get sick, they need care, but suddenly it seems that, you may not need care. Don't worry about it...your family will take care of you. At what expense to the emotional, physical, and financial well-being of family members? Peace of mind! People don’t buy long-term care insurance because they don’t think that they will live a long life. People don’t buy long-term care insurance because they don’t think that they will ever need care for a period of time. People don’t buy long-term care insurance because they don’t think about the consequences that providing care would have on their children and spouse. People don’t buy long-term care insurance because they don’t think about what would pay for care assuming they ever needed it, which, of course, they don’t think they ever will. Until they do.