An Abney Associates Ameriprise Financial Advisor On Long-Term Care Insurance

July 8, 2014

It's a fact: People today are living longer. Although that's good news, the odds of requiring some sort of long-term care increase as you get older. And as the costs of home care, nursing homes, and assisted living escalate, you probably wonder how you're ever going to be able to afford long-term care. One solution that is gaining in popularity is long-term care insurance (LTCI).

WHAT IS LONG-TERM CARE?

Most people associate long-term care with the elderly. But it applies to the ongoing care of individuals of all ages who can no longer independently perform basic activities of daily living (ADLs)--such as bathing, dressing, or eating--due to an illness, injury, or cognitive disorder. This care can be provided in a number of settings, including private homes, assisted-living facilities, adult day-care centers, hospices, and nursing homes.

WHY YOU NEED LONG-TERM CARE INSURANCE (LTCI)

Even though you may never need long-term care, you'll want to be prepared in case you ever do, because long-term care is often very expensive. Although Medicaid does cover some of the costs of long-term care, it has strict financial eligibility requirements--you would have to exhaust a large portion of your life savings to become eligible for it. And since HMOs, Medicare, and Medigap don't pay for most long-term care expenses, you're going to need to find alternative ways to pay for long-term care. One option you have is to purchase an LTCI policy.

However, LTCI is not for everyone. Whether or not you should buy it depends on a number of factors, such as your age and financial circumstances. Consider purchasing an LTCI policy if some or all of the following apply:

- You are between the ages of 40 and 84

- You have significant assets that you would like to protect

- You can afford to pay the premiums now and in the future

- You are in good health and are insurable

HOW DOES LTCI WORK?

Typically, an LTCI policy works like this: You pay a premium, and when benefits are triggered, the policy pays a selected dollar amount per day (for a set period of time) for the type of long-term care outlined in the policy.

Most policies provide that certain physical and/or mental impairments trigger benefits. The most common method for determining when benefits are payable is based on your inability to perform certain activities of daily living (ADLs), such as eating, bathing, dressing, continence, toileting (moving on and off the toilet), and transferring (moving in and out of bed). Typically, benefits are payable when you're unable to perform a certain number of ADLs (e.g., two or three).

Some policies, however, will begin paying benefits only if your doctor certifies that the care is medically necessary. Others will also offer benefits for cognitive or mental incapacity, demonstrated by your inability to pass certain tests.

terrencejackson · July 10, 2014

People are living much longer these days, which makes them more vulnerable to diseases or conditions that will require long term care. The cost of assisted living facilities, nursing homes and other types of long term care services is expensive and the most sound solution to pay for this is through long-term care insurance.

It's good that you have pointed out important things about long term care insurance that can help people make the right decision in the future. I would just like to add another important factor that can certainly make a big difference that is the financial rating of an insurance company.

Through long term care insurance reviews, http://www.ltcoptions.com/long-term-care-insurance/long-term-care-insurance-companies/ confirms that consumers can find a carrier that can file for claims, stable and can provide high quality services. This is one factor that consumers forget that often leads to problems when it's time for them to file for claims. Aside from the cost of your policy, you should also consider the financial rating of the company who is issuing the policy.