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This article was prepared by Stuart Raider of the Raider-Dennis Agency, which has served MAP members' insurance needs for more than a decade. We have ways to plan for our retirement through savings plans and investment strategies. We buy health insurance to guard against possible medical emergencies. We provide for our loved ones in the event of our death or disability through various types of life and disability insurance. But what about the possibility that we or someone we love might need long term care? Long term care insurance can be a valuable tool in planning for the future. It offers protection that can help cover costs if the need arises for nursing home care, home care and many other related services. Statistics show that two out of every five Americans may need nursing home care at some time in their lives. The care is expensive and the current cost of nursing home care ranges from an average of $50,000 to over $100,000 a year in some areas of the country. It is impossible to determine whether you will need care, or how extensive that care might be. What is possible is to recognize the potential financial risk. As with other risks, it might be wise, if appropriate, to purchase insurance to cover that risk. You might think that Medicare or other federal programs will substantially cover the costs of long term care. However, other than private long term care insurance, there is no government program established to cover the majority of people needing long term care, Medicare, for example, is limited to skilled care, while most long term care is custodial. Medicaid is a joint federal and state program that does cover some long term care needs, but it is a welfare program established for the poor. Private health insurance currently covers only 6.7% of all long term care costs. Designing a long term care policy is a very personal choice. With, the assistance of a qualified agent, a policy can be put together to fit almost anyone's specific needs. There are two major types of long term care insurance policies. The traditional policy is what is known as a reimbursement policy. This policy reimburses covered expenses up to the benefit level in the policy. Typical covered expenses are nursing home care, assisted living care, home health care and adult day care. A newer design is sometimes referred to as a cash benefit or indemnity policy. These policies disregard covered care and simply pay a monthly benefit upon claim, similar to a traditional disability policy. The costs of the policies are highly dependent upon the age of the insured and the level of benefit selected. When is the best time to buy a long term care insurance policy? The answer is always now. This is true for two reasons: 1 - It is less expensive to purchase a policy now rather than wait until an older age; 2 - There is a risk of becoming uninsurable as time passes. Knowledge is powerful. It's now up to you to take advantage of what you know to protect your assets and your freedom of choice. Planning now can offer resources and continued support for yourself and those you want to keep safe. |
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