Long Term Care Insurance

Americans are living longer. 

It is predicted that approximately 70% of individuals over the age of 65 will be unable to complete at least two of the activities of daily living.  By 2025 it is expected that for every 100 middle age individuals, there will be 253 seniors (definition given for “seniors” varied by age groups – for those in their 20’s and 30’s, it was 65 years or over; people in their 40’s and 50’s, it was late 60’s or 70’s and for those in their 60’s and 70’s it was those in their 80’s and 90’s – all relative to the age of who is defining “senior”). 

But here is an interesting statement:  40% of people needing long term care are adults between the ages of 18 and 64.  So, who needs long term care insurance?

Do you have long term care insurance?  Do you even know what it is?  Let’s consider this:

  • You are diagnosed with a very progressive illness that will likely require nursing care in the future.
  • You are getting older and don’t have family.  What is going to happen when you need care later in life? 

Nursing care can cost $500 or more per day.  WOW!  How will this care be paid?  Do you have assets to cover the cost?  What is your monthly income?  What will happen if your assets are depleted?  Maybe you have a family member who can help.  Perhaps you have life insurance that provides for withdrawals against the death benefit.  Medicare or Medicaid.  Or you have long term care insurance. 

So, what can long term care insurance (LTC) do?  It can help to meet the financial needs for your care.  The earlier in life that you obtain LTC insurance, the cheaper the premiums are.  The policy can be tailored for each individual to pay for a certain amount per day, for a certain period of time, in certain circumstances, with certain diagnoses.  There can be inflation clauses factored in. 

And, now you say, why do I need LTC insurance? Won’t Medicare or Medicaid help?  Sorry to disappoint you, but you can’t count on either of those programs.  There are limitations on the benefits they will pay.

OK, so we are back to LTC insurance, but what if you want to stay in your own home? What will LTC insurance provide?  Depending upon your policy, it can help to pay for in-home care.  Nursing care, home care – LTC can help cover the cost. 

What’s not to at least consider?  Perhaps you may not want coverage for yourself or you are too young. That’s not to say that you couldn’t purchase it to cover any anticipated expenses for care for your parents to preserve their assets. 

So much to think about.

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Kay Sowa

About the Author

Kay Sowa is a paralegal in the Trusts and Estates Group at Capehart & Scatchard, P.A. She is an IRS Enrolled Agent, an Accredited Estate Planner®, and a Certified Trust and Financial Advisor. She oversees the trust and estate administration practice for the firm. She is an accomplished author and lecturer who has frequently spoken on behalf of a number of organizations including the National Business Institute and the Institute of Paralegal Education.

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