Q. What is long-term health care?
A. Long-term Health Care is a general term that refers to the kind of support or cares you need when you’re unable to perform daily activities (ADLs). ADLs are things like dressing, eating, and going to the bathroom.
Long-term care may be defined as having someone help you get ready each morning and night. Long-term care could also mean being placed in a nursing home for treatment or recovery. The nation’s population is growing faster than ever, and we live longer than ever before. According to Census Bureau projections, seniors 65 years and older will surpass children younger than 18 in 2034. As the United States population ages, more seniors will need long-term care services. This could be at home, in an assisted living facility, or a nursing home. But long-term care can be costly, especially if it is needed for prolonged periods.
Many people also mistakenly believe their government or health insurance will cover their long-term healthcare needs. Long-term health care is not covered by traditional health insurance. Although Medicare will pay for some long-term care, it is usually limited, only covering a maximum of 100 days, challenging to get, and you must have nearly all your assets to be eligible. (Unless you do proactive planning to protect your assets, which we can help you with if that’s something you value).
Long-term health care insurance was developed to fill this gap in healthcare coverage, which is relatively new. We’ll answer the most common questions to help you decide if you, or your loved ones, could benefit from long-term care insurance as part of your estate plan.
Some activities that are common in daily life (ADLs) include:
- Mobility (walking or moving): Ambulance
- Grooming and dressing
- Use the bathroom
- Continence management
- You can get in and out of a bed or a chair by simply lifting your legs.
Q. What are the various types of long-term care you can get?
A. Long-term care services usually fall into skilled care and personal care. Custodial personal care is also known as personal care, and it’s for those who need assistance with activities other than medical.
- ADLs include dressing, grooming, and bathing.
- Instrumental activities of daily life (IADLs) include grocery shopping, meal prep, and laundry.
Skilled nursing care is for those who need professional medical or rehabilitation services.
- Management of medication
- Monitoring vital signs
- IV feedings or treatments
- Speech, occupational, and physical therapy
- Wound care
- Mobility assistance
What is long-term insurance?
A. Long-term Health Care Insurance was introduced in the 1980s as “nursing home insurance.” It is meant to pay for long-term medical expenses if you cannot perform your daily activities.
These policies will cover you for personal and skilled care costs, wherever and whenever you need them. You could be able to get modifications done to your home to make it more accessible.
How does long-term insurance work?
A: Most policies require you to prove that you cannot perform at least two or three ADLs before your coverage kicks in. Many policies have a deductible or “elimination time,” which is a period between when you become disabled (eligible to benefits) and when your coverage begins.
Most policies have 90 days for elimination. However, some policies may offer a longer or shorter period. The premium will be more expensive if the elimination period is more straightforward. Long-term care policies often come with a predetermined benefit, which is the number of years it will cover.
A benefit period of 3 to five years is quite common for these policies. The Daily Benefit Amount, which is a dollar limit on how much coverage will be provided for daily care, is included in most policies.
When should you buy long-term care insurance?
A: The premiums for a policy are cheaper if you’re younger and healthier. So, it’s a good planning ahead to start investing in coverage as soon as you can. Most policies do not cover pre-existing conditions. It is possible to lose coverage if you wait until your condition worsens.
If you have one of these conditions, you will generally be disqualified from coverage.
- Already need assistance with ADLs
- You have AIDS (or AIDS-Related Complex)
- Alzheimer’s Disease, any type of dementia or cognitive dysfunction.
- Multiple sclerosis, Parkinson’s Disease or another neurological condition.
- A stroke occurred in the last year or two, or you have had strokes in the past.
- Metastatic cancer is present.
- You have renal failure.
The American Association (AALTCI) for Long-Term Care Insurance states that the best time to apply for coverage before your mid-50s is the best. Your health will not improve beyond that point, so you should apply for coverage before your mid-50s.
Q: How do I purchase coverage?
A: When you’re looking for long-term care insurance, it is a good idea to speak with several insurance companies and compare their benefits, care options and premiums. Although they may offer similar benefits and coverage, prices can vary greatly between companies. Ask about rate increases in the past, and the latest.
A fee-only planner is the best option for you to shop for a policy. They are not paid based on what coverage you choose. This will give you the best chance of success. If you’re working with a commissioned agent to help you shop for a policy, we can discuss the terms with you to make sure it’s right for you.
What are the most critical elements of a long-term care plan?
A: You must answer the following questions when you meet with an insurance provider:
- What is the time frame before benefits start?
- How many ADLs or capacities must you lose before coverage kicks into effect?
- What are the years of care covered?
- These are the most critical elements of a long-term policy. They will have the most significant impact on the quality of your coverage and the premium amount.
Can I get coverage for my parents?
A: You can purchase long-term care insurance to cover your parents. After paying for the policy, your parent(s), if applicable, will be named as the beneficiary. If you plan to care for your parents long-term, then you can invest in a policy to help you offset their expenses.
Long-term care insurance should be purchased as a family matter. This is because you will need your family members to represent you and file a claim when you need it. Therefore, it is important to inform your family about your type of policy, who your agent is, and how to file a claim.
You should also pre-authorize the person who will speak on your behalf to the insurance company. This is in addition to relying on a medical power of attorney. You should also have a properly drafted, regularly updated, and reviewed medical power of attorney.
How often should I check my coverage after I have an insurance policy?
When you reach your 50s, it is vital to review your long-term insurance policy annually. This will allow you to compare new products and adjust based on your needs. No matter what you do, you must make sure that you pay your premiums on time. You’ll lose all your investment and be unable to access the benefits if you don’t pay the premium, even for a short time.
A Key Component in Your Estate Plan
Your Personal Family Lawyer can help you find the best long-term care policy for your specific situation. Long-term health care insurance is an essential part of your estate plan. If you combine the proper estate planning strategies, you can be sure that your loved ones are protected no matter what.