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Long Term Care Insurance




Long Term Care Insurance is one of the fastest growing forms of Health Insurance.  With our fast paced society, a growing baby boomer generation turning age 65, and the continual increase in the number of people with Alzheimer's, it is becoming paramount that people prepare for the potential that they may lose all they possess if not properly prepared for the increasing chance that they may need some kind of assistance as they grow older.  Long Term Care Insurance can keep you from losing your assets if you should become unable to care for yourself.  As was the case in the past, children took care of their aging parents in their homes when needed.  However, today, parents can no longer depend on their children to care for them.  Our society demands that most married couples work in order to support themselves, requiring aging parent's children to be pre-occupied with making a living for themselves and their families, leaving aging parents to look out for themselves.

Long Term Care Insurance was created to fill a need so there would be a place for the ageing to go when they become unable to care for themselves.  Long Term Care Insurance covers several different levels of care for the ageing.

Activities of Daily Living (ADL's)

In order to receive Long Term Care Insurance benefits Long Term Care policies require that a person not be able to perform certain Activities of Daily Living (ADL's).  Activities of Daily Living can include:

  • Bathing
  • Continence
  • Dressing
  • Eating
  • Toileting
  • Transferring

Depending on the insurance policy, benefits will be paid if you are unable to perform two or three  of the ADL's.  The quality of Long Term Care policies is based on several things.  One of them is the number of ADL's required in order to receive benefits.   The fewer ADL's required in order to receive benefits the better the policy.  However, the number of ADL's required can also affect price.  The fewer ADL's required the higher the premium.

Elimination Period

Long Term Care Insurance plans allow you to choose how long you wait before benefits begin.  This is called the elimination period. The longer you are willing to wait before benefits begin, the less the premium.  Elimination periods are usually available from 0 days wait and can be 30 days, 90 days, 100 days, and 180 days and even up to 365 days. The longer you are willing to wait the lower the premium.

Benefit Period

Long Term Care policies also allow you to choose how long you want to be covered.  This is known as the benefit period.  Benefit periods can run from 1 year, 2 years, 3 years, 4 years, 5 years and even lifetime benefit periods are available.  Again, the longer you want to be able to receive care the higher the premium.

Types of Care

Long Term care policies usually offer three major types of care:

  • 1. Assisted Living
  • 2. Nursing Home
  • 3. Home Care

According to the National Association of insurance Commissioners Long Term Care Shoppers Guide; in 2007 the national average assisted living facility charged an average of $2,714 per month for a one bedroom unit or $32,568 per year.  Some residents pay a lot more, depending on their level of care.

The national average cost of a Nursing Home in 2007 was about $5,430 per month or $65,160 per year

The national average cost of Home Care in 2007 was about $16,000 per year (part time basic home care - home care aid three times a week).

Of course, those charges are higher today.

Covered Services

Long Term Care policies may cover the following types of services.  It is very important that you know what services are covered and where.

  • Nursing Home Care
  • Home Health Care
  • Respite Care
  • Hospice Care
  • Personal Care in your Home
  • Services in an Assisted Living Facility
  • Services in an Adult Day Care Center
  • Services in other community facilities

There are also many optional benefits that can be added to a Long Term Care Policy, such as inflation coverage to help meet the increased cost of care in the future.  Any options that you elect will add to the premium you pay.

Long Term care insurance should be considered very carefully in order to meet your needs, but at the same time meet your budget.  Professional Insurance Services can help you consider all these important aspects of purchasing Long Term Care Insurance.  Please give us a call and let us help.