What is Long Term Care Insurance and Who Needs It?
Long term care Insurance is insurance to pay for care that you need if you can no longer perform everyday tasks (activities of daily living) by yourself due to a chronic illness, injury, disability or the aging process. Long term Care Insurance also covers the supervision you might need due to a severe cognitive impairment (such as Alzheimer’s disease).
This type of care isn’t intended to cure you. It is chronic care that you might need for the rest of your life. You can receive long term care in your own home, a nursing home or another long term care facility, such as an assisted living facility.
People often confuse long term care with disability or short-term medical care. Long term insurance does not cover:
- Care that you receive in the hospital or your doctor’s office
- Care you need to get well from a sickness or an injury
- Short-term rehabilitation from an accident
- Recuperation from surgery
Who Needs Long Term Care Insurance?
Anyone can need long term care insurance at any time in their life. Currently, 40% of people receiving long term care services are working age adults between the ages of 18 and 64.
As people age and our average life span increases, the chances of needing long term care increase. After age 65, an American has more than a 70% chance of needing some form of long term care. In general, the longer you live, the higher your odds of needing long term care.
Check out Susan’s Elder Life Series videos to see how Susan has helped other families with finding Long-Term Care Insurance.
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Frequently Asked Questions about Long-Term Care Insurance
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What is Long Term Care Insurance?
Individuals need long-term care when a chronic condition, trauma, or illness limits their ability to carry out basic self-care tasks, called activities of daily living (ADLs), (such as bathing, dressing or eating), or instrumental activities of daily living (IADLs) (such as household chores, meal preparation or managing money).
Long term care comprises a broad range of services provided to persons of all ages who have lost their ability to function independently because of a physical or mental impairment. Long-term care differs from other types of health care in that its goal is not to cure an illness, but to allow an individual to attain and maintain an optimal level of functioning.
Long term care services include personal care, home health care, rehabilitation, adult day care, care management, social services, assisted living, and nursing home services. Long term care services may be delivered on a regular basis or intermittent over a period of several months, several years, or a lifetime.
By 2030, one in five Americans will be a senior citizen. If you are a Baby Boomer, this includes you. Americans are living longer and healthier, thanks to better diet, better medical care and safer living & working environments. Yet no one is immune to the effects of aging and longevity - effects that often result in reduced physical or mental ability.
Right now, the average rate for a private room in a nursing home is $181 a day, or about $66,000 a year, according to a 2003 survey by Metropolitan Life Insurance Co. If the room rates reflect current annual increases in nursing-home costs, then by 2021, when today’s 60-year-olds might need such care, the average rate will have risen to about $480 a day, or $175,200 annually.
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What conditions may lead to a need for long term care?
The list of conditions that may trigger the need for long term care is lengthy. It includes, but is not limited to: spinal cord injuries, stroke, physical frailty, Alzheimer’s disease, Huntington’s disease, dementia, senility, AIDS, and the long term effects of diabetes, autoimmune disorders such as rheumatoid arthritis, circulatory diseases and heart conditions, Parkinson’s disease, Amyotrophic Lateral Sclerosis (also known as Lou Gehrig’s Disease), and multiple sclerosis.
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Who provides Long Term Care?
About 64 percent of the older persons with severe disabilities who reside in the community rely on family members. While a significant amount of long-term care is provided by licensed individual, a 2004 study conducted by the National Alliance of Cargiving and the AARP indicates that there are some 44.4 million adult caregivers* in the U.S.
Nearly 60 percent of caregivers either work or have worked while providing care, with many having to make adjustments to their work life, including reporting late to work or even giving up their jobs entirely.
*Caregiver: An individual, such as a parent, foster parent, or head of a household, who attends to the needs of a child or dependent adult.
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Doesn't my group health insurance plan and Medicare cover the cost of care?
Group health insurance plans cover the cost of treatment for illnesses but do not cover services that may be considered custodial in nature or just support activities of daily living. Therefore, they do not cover the cost of most long term care services.
Medicare only plays a small role. For example, Medicare will only cover 100 days of treatment in a skilled nursing facility after a hospital stay of at least three days; beneficiaries must make a high coinsurance payment from days 21-100. Most long term care is not skilled care and does not follow a hospital stay.
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Isn't long term care insurance very expensive?
Like life insurance, the younger you are when you add this benefit to your financial plan, the less expensive it is. Your age at the time you purchase the insurance is the primary factor in determining your cost for a basic policy.
The cost increases depending on whether you choose to add optional benefits to the basic policy or if you choose to increase your benefit over time to account for inflation. Your health is also a factor. Many people do not qualify due to poor health conditions.
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If I need long term care I will not want to be placed in a nursing home. Can I avoid being placed in one?
Long term care insurance can help you stay in your home or in the home of others, such as the home of a friend or relative. For example, you can use your daily benefit to help you pay for services such as home health aides, caregiver training, and adult day care.
Long-Term Care Insurance Blog Articles
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