WHAT IS LONG-TERM CARE INSURANCE?
As we get older, there are many specific health care costs we’ll encounter that traditional health insurance doesn’t cover. Long-term care is one of those costs.
This specific type of insurance is designed to help policyholders cover expenses incurred for services that assist with activities of daily living.
WHAT DOES LONG-TERM CARE INSURANCE COVER?
Long-term care (LTC) insurance covers costs associated with any type of care assistance for those unable to live alone and provide for themselves daily. This includes services (both in-home and nursing home) that provide custodial care to assist with bathing, dressing, and eating.
This type of insurance can also assist with costs associated with treating chronic illnesses or other conditions that can arise due to old age, such as treatment and care for Alzheimer’s patients.
LTC does not, however, cover hospital costs, medications, or doctor’s visits. These are all things that would be covered under a policyholder’s regular health insurance or, in many cases, through medicare.
WHO NEEDS LONG-TERM CARE INSURANCE?
Everyone. While medicare health insurance is granted to everyone once they turn 65, it doesn’t cover the long-term care costs. It’s estimated that at least three out of every four seniors will need some type of specialized long-term care.
Long-term care facilities can be incredibly expensive. Depending on where you live, you could pay anywhere between $200 to $400 per day for a nursing home.
COST OF LONG-TERM CARE INSURANCE
As the life expectancy of humans changes, the terms of life insurance policies change as well. The cost of any life insurance policy, especially for long-term care insurance, increases significantly as you get older, and it’s wise that you purchase it sooner rather than later.
Premiums will cost less if you purchase them while you are younger. If you haven’t already purchased health insurance by the time you are 60, it may no longer be affordable for you.
According to the American Association for Long-Term Care Insurance, in 2020 “the average annual premium cost for a 55-year-old couple was $3,050”.
It stands to reason that a couple 60 years of age who are just purchasing LTC would likely be paying close to $3,500, and the cost would only continue to rise with the age of the couple. A couple in their 70’s might end up spending an estimated $14,000 or more per year.
However, it’s important to note that LTC policies increase annually to account for inflation and the rising cost of health care. The 55-year-old couple who paid $3,050 their first year may end up paying more in annual premiums by the time they are 60.
THE BOTTOM LINE
Long-term care insurance is complicated, and coverages and costs will continue to change as we continue to live longer and longer.
Take the time today and speak with a professional long term care insurance specialist. Here at Woodland Advisors, we have your best interest in mind and will work with you to find the best possible options for your needs, but current and future.
Schedule your free consultation call here