The cost of long term care is on the rise, and with all the things you have to save money for — college, retirement, buying a home, life insurance, investments, emergency funds and more — it’s a good idea to learn more now about long term care insurance coverage.
Long term care coverage is a type of insurance policy that generally reimburses you for the cost of home healthcare, assisted living or skilled nursing facilities. Unlike Medicare insurance that covers primarily skilled medical care, long term care insurance typically covers unskilled care that provides assistance with basic “activities of daily living.” There is a wide range of options for coverage, and you often have to go through medical underwriting. This means you want to have coverage in place before you actually need to use it so that you will qualify.
Make sure you do your research and know what you’re paying for when you choose a long term care policy. Carefully read you policy so you know how it operates, what is covered and what isn’t covered.
The cost of your insurance will be based on your age, gender, health and the level of benefits you want to receive. This means the older you get, the more money you will pay for monthly policy premiums. Wait too long, and you may not qualify at all. You want to purchase coverage while you are still young and healthy enough to qualify. Remember, though, that when you purchase coverage, the amount of money you will need to pay for services will go up with inflation. People generally purchase coverage many years before they will actually need to use it. You can purchase an option to increase your benefit by a percentage to account for inflation.
The long term care policy that you purchase will provide different limits on coverage based on a range of options that they offer. Your premium will be affected by the term of the policy, the waiting period, the daily or monthly benefit amount and inflation options, to name a few. Purchasing a policy as a couple may provide discounts in the overall premiums. Policy terms can generally be purchased for a limited number of years, or a lifetime. It’s important to fully understand what you are purchasing so that you have adequate coverage when you need it.
As our life expectancies increase and we are living longer and healthier lives, the need to consider long term care also increases. Long term care insurance coverage should be a consideration when you are putting together your personal financial plan. More information on long term care can be found at http://longtermcare.gov.
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“Finance Made Simple” blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.