When many people consider long-term care, they think of nursing homes, extended hospital stays, and, generally, the elderly. But the need for long-term care doesn’t only impact those who are advanced in years. The U.S. Department of Health & Human Services reports that about 40% of people currently receiving long-term care are adults under age 65.
This statistic can be shocking, but it shows how unpredictable the need for long-term care can be. And, especially if a family member becomes a full-time caregiver, the financial burden can be extraordinary. Knowing the options for long-term care financial support before you need it can help you avoid experiencing lasting financial harm and lessen the stress if you need to make sudden decisions.
Long-term care policies aim to help individuals maximize their independence and function at a time when they are unable to be fully independent and need help with at least two of the six Activities of Daily Living (ADL), which are bathing, dressing, using the toilet, transferring to or from a bed or chair, caring for incontinence, and eating.
Most policies have five basic components:
- Benefit amount: the maximum amount the policy will pay per day or per month for the benefits the policy provides
- How benefits are paid: usually either through reimbursement, daily indemnity, or cash
- How long benefits are paid: the benefit period, generally anything from two years to lifetime benefits
- Elimination period: the period of time you’d have to pay out of pocket care before the insurance company begins to provide coverage, similar to a deductible
- Inflation protection: with this feature, the policy keeps buying power in the future if LTC costs increase at the same rate as the policy’s inflation option
While 40% of long-term care recipients aren’t elderly, the need for long-term care for those advanced in age is rapidly increasing. According to the U.S. Department of Health & Human Services, the number of older Americans who will require long-term care services is projected to increase to 12 million by 2020. Beyond that, nearly 70% of Americans over the age of 65 will require long-term care at some point. Are you prepared for what will happen to your family if you fall into this majority?
Our team has personal experiences with long-term care in our families, so please feel free to contact us. We would love to discuss how these policies might be able to help you.
All long-term care insurance policies have limitations and exclusions.
Long-term care insurance policies may provide choices and flexibility for your long-term care needs. The cost of a long-term care insurance policy depends, in part, on the type and amount of services and benefits you choose to cover, your age, and your health.