Long-Term Care Insurance 101

In our previous postings we have discussed the prevalence of Alzheimer’s disease among the elderly, and also the importance of considering all of one’s options as part of thorough and detailed estate planning.

One of the means to ensure one will be taken care of, and not be a burden to one’s family, is to purchase long-term care insurance.

And yet, most people don’t have it. Why? Perhaps there is a lack of understanding about what Medicare will and will not provide and what an individual may or may not need.

A recent article provides some illumination about long-term care insurance or LTCi. Long-term care insurance acts as a stop gap for care that is not covered by Medicare. For example, Medicare may cover a portion of nursing home costs if someone needs around the clock nursing care, but for those who need less care, such as those with dementia or Alzheimer’s disease, LTCi would be needed.

Industry experts recommend looking at the following options when selected an LTCi plan.

  • Choice of a daily or monthly benefit
  • Choice of policy duration in terms of years
  • Choice of waiting period for the policy to begin (similar to disability insurance)
  • Choice of inflation protection or no inflation protection (choose inflation protection)

Like disability insurance, many people pick the best that they can afford, given their current circumstances. Without LTCi, someone’s assets could disappear quickly. A study reported that in 2010 in Los Angeles County, a semi-private room cost $67,000 per year which is about $185 per day.

As mentioned in previous postings, long-term care insurance should be just one element in an estate plan developed with the advice of a qualified professional.

Source: Examiner, “Understanding long term care insurance isn’t that confusing,” Colleen King, May 22, 2012