How Long Term Care Insurance Works

long term care insurance

According to the U.S. Department of Health and Human Services, almost 70% of people aged 65 will require some kind of long-term care soon.

Normal health insurance does not cater for long-term care costs. Medicare also won’t help because it will only cover a short stay in the nursing home or when you require specialized nursing care in a rehab. It does not pay for custodial care services, which includes help in performing day-to-day activities and supervision.

If you need assistance and do not have insurance to cater for your long-term care expenses, then you will be forced to pay from your pocket. You can obtain support through Medicaid, the state, and federal government insurance programs for those with lower revenues, but that is after you have utilized all your savings.

Why Do You Need Long Term Care Insurance?

To protect savings

The high cost of long-term care can deplete your retirement savings quickly. According to a recent survey conducted by Genworth Financial Consultants, the cost of care in a semi-private nursing home is $8000 per year. However, you can save your retirement savings when you use your long term care insurance to cater for your nursing home expenses.

To be able to select your preferred care provider

It is clear that if you spend more money to buy long term care insurance, you are likely to enjoy better quality care than a person who only relies on Medicaid. Medicaid does not cover for assisted living in most states.

Purchasing a long term care insurance policy can be hard for people with low savings and incomes but insurance experts advise that you use 5% of your income to buy a long term care policy.

To access quality care quickly

If you need care and don’t have insurance, then you will be forced to use all your incomes and savings. It is after you have depleted all of them that the government will come in and take you to a nursing facility.

You will have a chance of accessing care faster if you have long term care insurance.

How Does Long Term Care Insurance Work?

To purchase a long term care policy, you only need to fill out an application form and answer a few health-related questions. The insurer may request that you bring your medical records for verification while interviewing you face-to-face or on the phone.

After that, you select your preferred coverage amount. The policy will indicate the amount payable every day or during your whole lifetime.

Once the coverage amount has been approved and your policy has been issued, you will now start contributing your premiums.

Most insurance companies will allow you to start enjoying the benefits when you cannot perform two activities from a list of six activities for daily living. These six activities include eating, dressing, bathing, toileting, transferring, and caring for incontinence.

When you require care and wish to make a claim, the insurer will assess your medical records or may send a qualified nurse to evaluate your condition. They will consider your plan of care before approving your claim. Most policies will set a daily limit until you attain the lifetime maximum.

Featured Image: depositphotos/kchungtw

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