Long Term Care Insurance Rate – While the majority of our focus is on helping families through the funeral and burial process and connecting families with resources that are available in their time of need, more and more, families are asking for help providing care for their sick loved one person, long before the funeral thoughts are made. This is especially true for “Sandwich Generation” caregivers. “Sandwich Generation” is the name given to middle-aged men and women caught between caring for their young children and caring for their elderly 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 about nursing homes, retirement communities, hospice care, and insurance coverages. The hope of this article is to reduce the confusion and give the Sandwich Generation, and others, answers to some of these questions. strives to be a resource for families with a variety of issues and hopes to ease anxiety surrounding end-of-life issues.
Long Term Care Insurance Rate
At its core, long-term care insurance is a way for senior citizens or families to pay for nursing home, assisted living and community retirement care. The industry is relatively new and still developing, but has gained traction in recent years.
Why Is Long Term Care Insurance Worth It?
, Laura Santhanam, “Navigating the Complexity of a Long Term Care Insurance Policy” PBS Newshour, January 9, 2015. This private insurance reduces the financial burden of paying for care when a loved one can no longer live at home. With the annual cost of nursing home and assisted living care averaging between $40,000 and $80,000 depending on the level of care required, the cost of long-term care can be debilitating.
Many families inadvertently dip into personal, retirement and annuity savings for long-term care costs and take on personal debt to pay for a loved one’s care. While many senior citizens have used Medicare services to help with health care costs, Medicare does not cover long-term care arrangements. Many seniors will need to apply for Medicaid or privately finance their long-term care accommodations. This is where long term care insurance tries 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 policyholder must meet before the insurance will begin to cover the cost. For example, a policyholder may have to deal with “impaired activities of daily living” where they need help bathing, brushing their teeth or using the toilet before policy benefits start. In this case, certainly any person dealing with early dementia or Alzheimer’s should consider purchasing a policy.
Likewise, a person who may not need to move into a full-time facility but would appreciate more supervision at home should consider long-term care insurance and whether its benefits would help cover day-to-day nursing costs. Annually, day-to-day home health care averages $45,000, and again, unless the family is able to privately fund these costs, a long-term care insurance policy can reimburse the family for all or part of that $45,000. $.
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Families who are able to pay privately for a few months of long-term care should consider long-term care to pick up where their private finances leave off. Many families are able to pay for two or three months of care, but little more than that. With Medicare not paying for any of these and Medicaid requiring income requirements before an insured can be approved, long-term care insurance can fill these gaps.
Perhaps most importantly, any senior citizen facing any type of terminal illness or diagnosis with a “fair to poor” outlook should discuss long-term care with their loved ones. Consider the story of Verna. Verna was diagnosed with early onset dementia after a stroke. For a time, Verna was safe living at home and needed minimal supervision. As her dementia progressed, Verna’s self-care declined to the point where she needed care at home. When Verna entered the nursing home, she was 85 years old. Despite her diagnosis, her doctor deemed her to be in good health and predicted she would live for at least another ten years. Ten years of $45,000 in annual nursing home expenses could easily deplete her life savings and any retirement accounts she had left. Verna was grateful that her children chose to purchase long-term care insurance soon after her diagnosis, as it greatly reduced the financial burden of paying for ten years of home care.
Verna’s example serves to highlight the importance of making long-term care decisions a family conversation, both immediately after diagnosis and while her body and mind are still relatively healthy. While Verna may have initially been well enough to make the decision to purchase long-term care insurance, if she had avoided the issue altogether, her children and family would have been left with the far-reaching financial consequences of ten years of long-term care. Her family would have been left with the decision to move her to a different nursing home or resign to a different level of care, depending on the family’s 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-ARP. Often, military veterans can use Department of Veterans Affairs hospitals and communities to determine what types of care are already covered by VA benefits and what additional policies should be purchased. Many states also have government-sponsored programs that may be able to provide additional resources for long-term care insurance. Again, a good place to start would be an Area Agency on Aging or local senior center to determine if the community has a link or list of resources available to the family.
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Applying for long-term care insurance is similar to applying for any insurance policy. Be prepared to answer standard questions about contact information and emergency contacts, as well as financial, health, and personal preference questions. For example, some insurance policies may not cover completely private rooms in the nursing home setting, but other policies may. By asking the broker what specific services are covered, a family can ensure that their loved one’s preferences are taken into account.
This is probably the hardest question to answer. Similar to funeral and burial estimates, costs vary by provider and state. When considering purchasing long-term care insurance, families should consider creating a list of ten care facilities. As the family visits each facility, the family should note what insurances are accepted, what services the insurance would cover, any recommendations the facility has, and whether the facility is right for their loved one. Additionally, the family should inquire about the per diem of care, as many long-term care policies do not go into effect until the insured has been in the facility for a specified number of days. With all of this in mind, the family should be able to not only narrow down the list of facilities they are comfortable with, but also narrow down the long-term care insurance companies they are willing to research.
Some insurance companies provide lists of state facilities that accept certain policies. For example, United Policyholders in California was able to create a database of insurance resources, costs and programs available to citizens of that state. The aforementioned AARP resources also allow consumers to compare and obtain information about acceptable policies before visiting an assisted living or nursing home facility.
As in the previous section, the answer to this question is very vague, “it depends”. Premium rates depend on the person’s age at the time of purchase, overall health and the type of cover sought. 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.
Rules For Tax Deductibility Of Long Term Care Insurance
, AARP “Planning for Long-Term Care: Your Resource Guide” 2010. Compared to the aforementioned $45,000 annual cost, $2,050 and even $3,109 don’t seem like shabby investments.
Shopping for long-term care insurance is very similar to shopping for other types of insurance in that you shop around for the best price and the best comprehensive policy. As with car insurance, a family shouldn’t be surprised if a safe policy covers the bare minimum of a loved one’s expenses and the family has to dip back into savings. Likewise, a more comprehensive policy may have a higher annual premium, but may cover ninety percent of a loved one’s care. Any insurance agent or broker should be able to answer these types of questions for the family before purchasing any policy.
In addition to the financial pains and sticker shock that come with enrolling a loved one in long-term
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