If you’re a healthy, active adult over the age of 50, it can be hard to picture yourself needing long-term care in the next few decades. Long-term care is defined as any hands-on assistance with any of the activities of daily living (ADL), such as eating, bathing and dressing. It could include in-home care, assisted living, nursing home care or adult daycare. If you’ve never stopped to consider the value of a long-term care insurance policy, it’s time to count the costs and take stock of your health, finances and any risk factors that apply to you.
Why Do You Need Long Term Care Insurance?
Long-term care isn’t cheap. According to Genworth Financial, a private nursing home room cost an average of $92,378 in 2016. A home health aide cost $46,332. The average adult likely does not have the resources to pay for this entire sum out-of-pocket. Don’t assume you can fall back on Medicare – Medicare only pays for skilled nursing or therapy after a three-day hospital stay. Medicare doesn’t recognize song-term care as a medical expense. Medicaid only pays for a nursing home after all of your assets have been depleted. Long-term care insurance safeguards your finances.
Relying on loved ones for caregiver services can be emotionally stressful for both parties. You may have feelings of guilt that your spouse or child are putting their life on hold for you. For the caregiver, they’re likely to experience missed job opportunities, stifled career growth and they may compromise their own retirement savings. Long-term care insurance ensures your loved one won’t be required to become your daily caregiver.
Consider These Four Factors
In general, 70 percent of people over age 65 will eventually need long-term care. If you live alone, you’re even more likely to need assistance. Since women live longer than men, your gender may affect your chances of needing long-term care as well.
When you’re considering signing up for a policy, take these four factors into consideration:
- Your Age
This is important: the earlier you purchase long-term care insurance, the lower your premium will be. Putting off gaining this type of coverage will only make it more expensive down the road.
- Your Health
If you’re currently in good health, your policy will be much less expensive. If you wait until health issues arise, the premiums could spike or you may be denied coverage altogether.
- Family Health History
Does your family have a history of Alzheimer’s disease or high blood pressure? If you’re at a higher risk for any illnesses, a long-term care insurance policy is highly recommended.
- Your Finances
If you’re already in a lower income class and have little to no retirement savings, it doesn’t make sense to purchase this type of policy. When your assets total $50,000 or less, Medicaid will likely cover your expenses if you need long-term care. If your assets total over $1 million, you will likely have the resources you need to pay for long-term care out-of-pocket, should the need arise. When your assets fall somewhere in between these two numbers, a long-term care insurance policy provides the maximum financial benefit.
Finding the Right Policy for You
Long-term care insurance isn’t always easy to understand. Policy provisions and terms aren’t easy to interpret. Our team at My Senior Health Plan is here to help. We will help you compare policies and translate the fine print. Contact us today to learn more about long-term care insurance and start exploring the options that are right for you.