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Long Term Care (LTC)

A Long Term Care Insurance policy helps pay for the care you need when you can no longer care for yourself. It will protect your family’s financial future and your own investments and savings.

What is Long Term Care Insurance?
Long-Term Care includes a wide range of medical and support services for people with a degenerative condition (say Parkinson's; or those that occur after a stroke), a prolonged illness (cancer) or a cognitive disorder (Alzheimer's). If these make you think of conditions that affect older individuals, you are right. Most people need long-term care in their later years (typically their 80s).

But, younger people need long-term care as a result of accidents (falling off roofs and motorcycle accidents especially for men) or illnesses that tend to inflict younger people like Multiple Sclerosis. Long-Term Care is not necessarily medical care but rather "custodial care." Custodial care involves providing individual assistance with activities of daily living or the supervision of someone who is cognitively impaired. To better understand Long-Term Care, think of the activities that you performed when you woke up this morning. You probably stepped out of your bed … walked to the bathroom … used the toilet … took a shower … got dressed … ate breakfast.

When you are healthy it is easy to take for granted these Activities of Daily Living (ADLs). However, when you or a loved one is stricken with a degenerative condition such as a stroke or Alzheimer's, performing these ADLs becomes impossible without the assistance of another person. As we age, performing these simple functions becomes difficult; often impossible. This type of care is what Long-Term Care means. It is the same type of care that a parent must provide for their new baby. This type of care is chronic (full-time) and thus becomes very expensive. Long-Term Care can be provided in many settings including nursing homes, your own home, assisted living facilities and adult day care.

You must qualify (health) for long-term care insurance. Not everyone can. Because health changes, especially as you grow older, it's smart to look into this well before you reach retirement age (Mid 50s are generally the best time to start).

Health qualifications can also vary from one insurer to another. If you're in great health, don't use tobacco products, take no medications -- then every insurer will accept you. Each insurer sets their own health-qualifications and they change from time to time.

You're only going to buy long-term care insurance once. Deciding to buy long-term care insurance is a financial and emotional decision. But, it's different than buying car or home insurance, which people switch from time to time. It's almost never economically advantageous to switch (primarily because costs are based on your age at application).

Long-term care insurance can be far more affordable than most people think. Cost is an issue; so you need to know there are many ways to make this protection affordable.

How Come I'm Just Hearing About Long-Term Care?
Long-term care is new and that's simply because we're living longer lives, into our 80s, our 90s and even 100s. When you live a long life, chances are you're far more likely to need long-term care. The average life expectancy in the United States did not reach 65 until about 50 years ago. The average life expectancy now is well over 70 for both men and women. And, the fastest growing group in the United States is people over the age of 85. Experts estimate that by the year 2040, we will have over a million people in the United States over the age of 100. So, this is a new issue that your grandparents and (depending on how old you are) your parents didn't have to deal with. But, if you live a long life ... you're going to need to have a plan for the risk of needing long-term care.

How Many People Have Long-Term Care Insurance? Some 8 million Americans have long-term care insurance and about 400,000 new policies are issued each year (2008 data)

What is the Cost of Long-Term Care Services?
A year in a nursing home now averages more than $40,000 and can exceed $100,000 annually in some parts of the country." - The Wall Street Journal 3/31/99 Long-Term Care services are very expensive. Quality nursing homes are always filled to capacity and they are consequently able to command a hefty fee for services. Home care is also expensive. Bringing a home health aide into your home every other day for a 4 hour visit can easily cost $1800 per month. When the home care approaches 8 hour visits every day, the costs rise to $7200 per month. At this point, the care recipient begins to receive facility based care simply for economic reasons.

If I'm On Medicare - Am I Covered?
There are 4 main ways in which to pay for Long-Term care, cash, Medicare, Medicaid, or private insurance. Before you begin paying for Long-Term care insurance it is critical that you plan early so you make the best decision.

What If I Never Use My Long-Term Care Insurance?
People seem to have the mindset that if they buy long-term care insurance, they had better use it (or they'd be wasting their money).These same people would never say, "I'd better total the car this year, or that car insurance was a total waste!" … or "Gosh, I hope my home burns to the ground because I've been paying premiums now for 10 years."

Get the picture. A lot of the media coverage about long-term care insurance has created the mindset that you had better use this. The truth is, long-term care is not for everyone and you really don't want to find yourself needing long-term care. If you purchase long-term care insurance, consider yourself lucky. If you buy it and you do need it … you should also consider yourself lucky.

The Biggest Mistakes to Avoid/ Waiting too long to start planning.
You don't have to buy insurance protection today; but at least find out what a policy will cost. If you take prescription medications or have health conditions, find out if you can health qualify. Ask what health changes might make you ineligible to health qualify.

Believing it won't happen to you. Denial is the best reason not to plan. And, honestly, hope you live a long life … never have an accident or illness. Yes, hope you never need long-term care. Also hope you never have a car accident. But hope is not a strategy. Planning for the future is.

Counting on government programs. If you are 50 or 55, are you really ready to count on Medicare and Medicaid being able to pay for the care you want in 15 or 20 years. If you prefer having choice, options and independence, then you'd better have a plan in place … just in case.

Good to work with an insurance professional. Because costs vary between insurers, your Insurance Professional will be able to get you the best coverage for the right price.

I'm NEVER Going To A Nursing Home; Why Am I Reading This?
Say the words long-term care insurance … and chances are you think nursing home. Today, that could not be farther from reality. Today, long-term care insurance really means home care coverage. It is true that the earliest policies issued in the 1980s generally paid for nursing home care. Today, one of the most significant benefits of long-term care insurance is the ability to receive care in your own home. And, almost half of all long-term care insurance benefits pay for home care. Here are some current facts:

There are about 7.6 million individuals currently receiving care at home. While 43 percent of all individual long-term care insurance policy benefits went for home care. Another 1.0 million Americans live in assisted living communities. And 32.9 percent of all individual long-term care insurance policy benefits went for assisted living care and costs. The rest, about 1.8 million Americans live in nursing homes. Many are there because Medicaid (the federal poverty program) pays for care in nursing homes. Only 24.1 percent of long-term care insurance policy benefits paid for nursing home care.

* Source: 2008/ LTC Sourcebook, American Association for Long-Term Care Insurance).


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