Long-Term Care Insurance
Have you ever worried about medical costs consuming your savings? Rising medical costs and longer life expectancies are making this a concern for many. There are some government programs like Medicaid and Medicare that can help cover some expenses of long-term care. However, there are restrictions on what is covered and qualifying for these programs may only be possible after you have used all your personal savings.
With long-term care insurance, you will be in a better position to get the care and services you need. You will have a greater opportunity to choose the type of care you want. You can protect your other assets and be in a better position to leave assets to heirs. You will be in more control of your financial future.
The Costs of Long-Term Care
Several studies have found that a year's stay in a nursing home can cost over $50,000. Even the cost of having a skilled professional come to your home and provide care three times a week can be over $15,000 annually depending on what type of care you need. While life expectancies are increasing, the amount of care we need (and its cost) seems to be increasing even faster.
Paying for Long-Term Care
Neither Medicare nor private medical insurance covers most long-term care costs. Medicare will pay for some special services, but most people receiving long-term care need help with things not covered, like bathing, dressing and eating. In most cases, Medicare does not cover these.
Medicaid will cover nursing home care, but it functions like a safety-net type program. To get Medicaid help, you must meet federal and state guidelines for income and assets. Many people start paying for care out of their personal assets and then qualify for Medicaid when their personal assets are depleted. While some assets and income can be protected, by the time you qualify for Medicaid, you will probably have used up most of the assets you had hoped to pass on to surviving family members.
Long-term care insurance is another way to pay for some or all of your long-term care. This type of insurance was introduced in the 1980s as nursing home insurance but now covers a great deal more. The greatest benefits of these policies are that they enable you to make more decisions about your care and they help protect your other assets.
Long-term care insurance can be a critical part of your overall financial plan. If you have substantial assets and do not want to rely on Medicare or Medicaid, you should consider it. When shopping for a policy, talk to several companies, ask a lot of questions and be sure to understand all the terms of the policy.
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