A long term care (LTC) insurance policy helps cover the cost of long term care, picking up where health and disability insurance leave off. LTC refers to help with daily activities - such as eating, bathing or dressing - over an extended period of time. It can also include help for those suffering from a severe cognitive impairment such as Alzheimer’s disease. LTC is generally provided in the patient’s home, an assisted living facility, or a nursing home.
Because: (1) at some point in your life there is a strong probability that you may need LTC (2) LTC is very expensive. The national average cost of a semi-private room in a nursing home is now $70,000 annually. By 2030, the average annual cost of nursing home care is expected to exceed $190,000 per year (3) in most cases, health and disability insurance cover only a fraction of LTC costs.
Don’t expect much help from Medicare or Medicaid3 either. Medicare pays for skilled care, however only for a limited period of time and generally does not cover custodial care (other than incidental homemaker services). Medicaid covers some long term care, but not until you (and your spouse) “spend down” nearly all of your assets.
The bottom line: If you want access to the highest quality of care and don’t want to trade the wealth you’ve accumulated over a lifetime to pay for your care, you need LTC insurance.
Remember, too, that the need for LTC can happen to anyone, even in the prime of life. And the cost of purchasing LTC insurance is substantially reduced when you purchase it while you’re young.
Long Term Care is the kind of care you need when you require substantial assistance with two activities of daily living which include bathing, toileting, continence, dressing, eating, and transferring or when you need substantial supervision due to cognitive impairment. Long Term Care typically refers to skilled, intermediate, and custodial care received at home or in an adult day care center, assisted living facility, or nursing facility.
Activities of daily living consist of:
Bathing
Toileting
Continence
Dressing
Eating
Transferring
The costs of long-term care services are significant and if they rise they rise a bit faster than inflation. By 2026, the daily rate could hit $486 a day, or $177,000 a year.
The average yearly costs tell the story:
Nursing Home - $68,988 (semi-private room)
Home Care - $24,700
Assisted Living Facility - $35,628
Once you are aware of the costs associated with long-term care services, and how these costs can impact your retirement savings, it is important to consider the options you may have. If you haven’t taken the time yet to give this topic careful thought, you are not alone: only 12% of the respondents to a 1999 survey indicated that they have adequately prepared for their own long-term care needs.
Having good information will help you make good choices, and Diverse Financial can help. Some people, for instance, wonder if the least expensive way to prepare for long-term care expenses is to “self insure” –in other words, to invest their money over time (in the stock market, for instance) to have when needed.
The risk, of course, is that the need will arise before you have saved enough, or that you will tap into your savings for another purpose beforehand.
Considering potential costs now may also help to ensure that you have options available later. For example, would you want to receive care at home, if the need arose? Purchasing a policy with Home Care coverage can help make that choice possible.
Long-term care insurance is the only insurance designed to help cover the costs of long-term care services. Without it, chances are good you will be responsible for paying most, if not all, of the costs out of your own pocket.
Long-term care services simply aren’t fully covered by any other type of insurance.
Even the best medical, HMO or PPO plan won’t adequately cover it because their focus is “acute” health care.
Disability income insurance is generally about replacing lost income and provides no long-term care insurance benefits.
Medicare covers some care in nursing homes and at home, it does so only for a limited time subject to restrictions.
What Medicare doesn’t pay, your Medicare Supplement won’t pay either.
Long-Term Care Insurance from Diverse Financial can help you preserve the savings and assets you have worked a lifetime to build. With a wide range of benefits, you can help ensure that you will be able to get the type of care you need, where you want it.
Depending on the coverage you choose, including services you require and other considerations, your options may include:
Home Care - for most people, the option to receive care in the comfort of their home is the choice they prefer most. Long-Term Care Insurance from Diverse Financial offers coverage for care generally provided by a licensed nurse, or a licensed physical, occupational, speech or respiratory therapist. You can also receive care or services from a certified private aide, home health aide, homemaker, or from a care advisor from a care management organization.
Adult Day Care Center - offers care, health support and rehabilitative services for adults during the day.
Assisted Living Facility - for many, these licensed (where required) facilities, provide a great way to receive skilled nursing or custodial care in an environment that helps maintains independence and an active lifestyle.
Nursing Home - your Long-Term Care Insurance policy from Diverse Financial will provide coverage for all levels of care, from skilled to custodial, in a Nursing Home.
Informal Care - many people would prefer to have a friend or loved one provide the care they need at their home. Care you receive at home from friends, neighbors, or relatives who are not health-care professionals. Some programs allow a benefit that provides some compensation to cover this care.
