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Long Term Care Insurance Premium – Although our main focus is on assisting families with funerals and funerals and connecting families with resources available in their time of need, more and more families are dealing with a loved one who is ill long before the funeral. asking for help with caregiving. considerations are made. This is especially true of the “Sandwich Generation” care providers. The “sandwich generation” is the name given to middle-aged men and women who are squeezed between caring for their young children and caring for their aging and sick parents.
, Kim Parker, “The Sandwich Generation: Rising Financial Burdens for Middle-Aged Americans,” Pew Research: Social and Demographic Trends, January 30, 2013. These caregivers often find themselves in a maze of questions related to nursing homes, retirement communities, and hospice care. , and insurance coverages. The hope of this article is to reduce the confusion and answer some of these questions for the sandwich generation and others. seeks to be a resource for families with a variety of topics and hopes to ease concerns about the end of life.
Long Term Care Insurance Premium
Basically, long-term care insurance is a way for senior citizens or families to pay for nursing home, assisted living, and retirement community care. The industry is relatively new and still developing, but has gained momentum in recent years.
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, Laura Santhanam, “Navigating the Complexity of Long-Term Care Insurance Policies,” PBS Newshour, January 9, 2015. This privately purchased insurance reduces the financial burden of paying for care when your loved one is no longer able to live at home. With the annual cost of nursing home and medical care averaging between $40,000 and $80,000, depending on the level of care required, long-term care costs can be debilitating.
Many families find themselves dipping into personal savings, retirement and annuity funds that aren’t earmarked for long-term care costs, and incurring personal debt to care for a loved one. While many senior citizens use Medicare to help with health care costs, Medicare does not cover long-term care. Many senior citizens must apply for Medicaid or privately finance a long-term care facility. This is where long-term care insurance seeks to fill the coverage gap.
Annual care costs should buy long-term care insurance. However, the complexity of long-term care insurance paints a different picture. Most of these insurance plans have a number of requirements that the policy holder must fulfill before the insurance starts covering the expenses. For example, an insured person may need to experience “activities of daily living” such as needing help with getting covered, brushing their teeth or using the toilet, before the policy benefits kick in. should consider purchasing an early onset dementia or Alzheimer’s policy.
Similarly, a person who does not need to move into a full-time facility but values more control in their own home may want to consider whether long-term care insurance and its benefits will help cover day-to-day nursing costs. should be checked. Home health care costs an average of $45,000 each year, and if a family can’t cover those costs privately, a long-term care insurance policy can reimburse a family for all or part of that $45,000. .
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Families who can afford to pay privately for a few months of long-term care should consider long-term care to pick up where their private finances have left off. Many families can afford to pay for two or three months of care, but less. When Medicare doesn’t pay for any of them, and Medicaid requires income requirements before an insured can be approved, long-term care insurance can fill those gaps.
Perhaps most importantly, any senior citizen with any type of terminal illness or with a “poor-to-justice” perspective should discuss long-term care with their loved ones. Check out Verna’s story. Verna was diagnosed with early onset dementia after a stroke. For a while, Verna was safe to live at home and required minimal supervision. As her dementia progressed, Verna’s level of self-care declined and she required nursing home care. Verna was 85 years old when she entered the nursing home. Despite his diagnosis, his doctor considered him to be in good health and predicted that he would have at least another ten years to live. A decade of $45,000 in nursing home expenses could easily wipe out her life savings and the rest of her retirement accounts. Verna was grateful that her children chose to purchase long-term care insurance immediately after receiving the diagnosis, as it greatly eased the financial burden of paying for ten years of nursing home care.
Verna’s case highlights the importance of discussing long-term care decisions within the family, even after diagnosis, even when her body and mind are still relatively healthy. Although Verna was initially well enough to make the decision to purchase long-term care insurance, if she had avoided the subject altogether, her children and family would have faced the financial consequences of decades of long-term care. experiences. Her family would have been left with the decision to move her to another nursing home or move her to another level of care, depending on the family’s available resources.
Many local senior centers have information about applying for long-term care insurance. Plus, any AARP member can easily find resources and compare costs on their website or by calling 1-888-OUR-AARP. Often, military veterans can use Department of Veterans Affairs hospitals and communities to determine what types of care are covered under VA benefits and what additional policies to purchase. Many states have government-sponsored programs that can provide additional resources for long-term care insurance. However, a good place to start would be your local senior center to find out if your area Agency on Aging or community has a list or contact of resources available for the family.
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Applying for long-term care insurance is the same as applying for any insurance policy. Be prepared to answer standard questions about contact information and emergency contacts, as well as financial questions, health questions, and personal preferences. For example, some insurance policies may not fully cover private rooms in a nursing home, but other policies may. By asking the broker what services are covered, the family can ensure that their loved one’s wishes are taken into account.
This is perhaps the most difficult question to answer. Funeral and burial costs vary by provider and state. When considering purchasing long-term care insurance, families should make a list of ten items for care. When the family visits each facility, the family should note what insurances are accepted, what services the insurance covers, any recommendations the facility has, and whether the facility is a “fit” for their loved one. Additionally, the family should ask for the daily care rate, as many long-term care policies do not go into effect until the insured has been in the facility for a certain number of days. With all of this in mind, the family should not only narrow down the list of facilities they are comfortable with, but also the long-term care insurance companies they are willing to research.
Some insurance companies provide a statewide list of facilities that accept certain policies. For example, United Policyholders in California has been able to create a database of insurance resources, costs and programs available to citizens of that state. AARP’s previously mentioned resources also allow consumers to comparison shop and learn about policies available before living or visiting a nursing home.
As in the previous section, the answer to this question is very vague, “it depends”. Premium rates depend on a person’s age at the time of purchase, general health, and the type of insurance requested. Costs vary by insurance company and age at time of purchase. In 2008, the average annual cost of long-term care insurance for a forty-year-old was $2,050 and $3,109 for a sixty-year-old.
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, AARP “Planning for Long-Term Care: Your Resource Guide” 2010. Compared to the $45,000 annual cost mentioned above, $2,050 or even $3,109 doesn’t seem like a bad investment.
Shopping for long-term care insurance is very similar to shopping for other types of insurance in that it pays to shop around for the best price and the best comprehensive policy. As with car insurance, a family shouldn’t be surprised if it covers the minimum cost for a family member and the family has to dip back into savings. Similarly, a comprehensive policy may have a higher annual premium but cover ninety percent of a loved one’s care. Every insurance agent or broker should answer these types of questions for the family before purchasing any policy.
In addition to the financial pain and sticker shock that comes with registering your loved one for the long term
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