Long-Term Care Insurance - A Few Factsby Dorothy McMahon, CSA
What is Long-Term Care Insurance?
Long-Term Care insurance is a contract that guarantees to pay for a sudden, unexpected, large continuing expense that would seriously deplete or exhaust your financial resources. It is not limited to nursing home care for the elderly. Long-Term Care insurance policies are actually designed to and may be the only thing that will keep us out of a nursing home when we need care for an extended period of time. When we are unable to take care of ourselves, we need to hire someone to do it!
Long-Term Care insurance should be a consideration whether you are 30 or 75 years of age. Accident or illness can happen at any age, any time.
The Medicare Misconception
Many people think Medicare covers Long-Term Care expenses, such as nursing home, elderly care and home health services. Medicare only provides shore-term benefits (a maximum of 100 days) for skilled care in a nursing home, following a three-day hospital stay. Medicare pays only for part-time skilled home-health visits and nothing for 8-hour shifts at home. Most Long-Term Care is custodial and not skilled care. Don't count on Medicare to pay for your Long-Term Care. It won't!
Medicaid pays for nursing home care only after you have spent down your assets and become impoverished. It pays nothing for assisted living or home health care. Patient power comes from the power to pay privately.
Why Do I Need Long-Term Care Insurance?
Chances are greater than 7 out of 10 that you will need Long-Term Care. What if you have an accident or a stroke and it doesn't kill you? The average cost of Long-Term Care today is $247 for a private room and $174 for a semi-private room, and the average stay is 2.7 years. That equates to an average of $63, 418 per year in 2003 or a total of $171,230 (with increases at 5% per year). Long-Term Care can last for several months or years. The chance that you will need Long-Term Care is greater than that of the loss of home or auto. Just as you would insure your auto or property, you should also include Long-Term Care insurance to reduce or eliminate the financial risks to you and your family.
Waiting Can Be A Costly Mistake
Not everyone qualifies for Long-Term Care insurance. A change in your health can result in higher premiums by as much as 50% for the same protection prior to your health problem. It's possible that a change in your health could make you completely ineligible at any price. If you buy a policy at age 75, the premium can be more than double than if you had bought the policy at age 65.
Dorothy is a Certified Senior Advisor and president of McMahon and Associates, LTD., the agency that specializes in Long-Term insurance. Call 248-844-9787 or email at email@example.com.
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