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.

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.

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.