Choosing Long Term Care Coverage

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.

 

Services Long Term Care Policies May Cover

  • Adult daycare – This is a supervised program for adults who need some help during the day. It may provide social, health and other support services.
  • Assisted living – Generally you can get apartment-style living with personal care and services like meal delivery with assisted living. This is for people who need a degree of help but can still do some things independently.
  • Nursing home – A skilled nursing facility can provide a robust amount of health care services, personal care, activities and rehabilitative services. Some policies only cover room and board for these facilities, so read your policy carefully.
  • Home care – Agencies can provide services in your home, such as help with bathing and light housework.
  • Care coordination – A professional can help coordinate your care by determining what you need, locating the right services and arranging for your care.
  • Home modification – Some policies may help modify your home to make it more accessible, by installing a wheelchair ramp or grab bars, for example.
  • Future service – If a new kind of long term care becomes available after you’ve purchased your policy, some policies may cover this under a future service option.

When to Shop for Insurance

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.

Keep in Mind

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.  

Wood Smith Advisors, a Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here .

“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.

 

Get New Posts Emailed to You!
*required
 

Finance Made Simple

Contact Wood Smith Advisors

(703) 753-8222

Email