Joel Berry Independent Broker
Start Date March 24, 2021
It is not uncommon for aging adults over the age of sixty-five to require LTC Insurance (long term care insurance) during their later years. This could mean they will require the services of an in-home care provider or something similar to what an assisted living center offers. In addition to finding a reputable provider, the bigger issue usually becomes whether or not the senior can afford LTC insurance.
Many Americans feel they are well protected between regular health insurance and Medicare; however, health insurance often falls short of covering the full cost of care and Medicare tends to pay for long term needs for an ironically short-term period. This can leave seniors requiring long term care at a distinct disadvantage if they do not have LTC insurance.
What Is LTC Insurance?
LTC Insurance, also referred to as long term care insurance, is an insurance policy that can help cover (at least in part) an aging senior’s long-term health costs. As most insurance policies do, this one requires holders to pay monthly premiums in exchange for policy payouts to go toward long-term care provided via care at:
- nursing homes
- assisted living centers
- adult day cares
Who Is Eligible to Get LTC Insurance?
Aging seniors who are in reasonably good health but want to be prepared to pay for long-term care in the future are the target demographic for LTC insurance. This allows them to plan ahead and should they need this type of service, the policy will already be in place.
One thing to keep in mind with LTC insurance is that it is something to have in place before you need it. In other words, if you are a senior or care for a senior that is in questionable health or needs long-term care right now, LTC insurance may not be for you. It is rare that insurance companies will accommodate seniors already receiving long-term care with a policy.
How LTC Insurance Works
An adult in their fifties or sixties in good health that wants to plan well for their future can opt to purchase a long-term care insurance policy. To do so, they typically need to make monthly payments that tend to be consistent from month to month. The specific price depends on the type of policy and coverage an individual chooses.
What happens when the adult is ready to utilize their policy depends heavily on their specific LTC policy. In some cases, the policy will make payments to the senior who can then in turn pay a care provider. However, it is far more common for the policy to make payments directly to the professional care service. Please note, this can be an issue for family members who provide care as they are typically not recognized as a proper home care agency.
Depending on the specific type of LTC insurance policy in place, it is worth noting that there is something called an elimination period that can come into play. This typically means that a policy may have a window of time in which seniors must wait to access the funds until they are eligible to receive policy benefits. This may be as little as several weeks all the way up to three months or more.
Considerations for Purchasing LTC Insurance
Insurance can feel complicated with so many different policies and provisions to choose from. To help you in your search for LTC insurance, it is best to keep the following considerations in mind:
Buy it before you need it
Most insurance companies will not allow seniors with existing health problems or those that already require long-term care to purchase LTC insurance policies. On average, it can be a good idea to consider purchasing this kind of policy in your fifties or sixties, before you need it.
It can be tempting to choose a lower priced policy since you don’t even really know if you will need it yet, but a policy must be able to sustain you at least in part if you do need it. On the flip side of that, it can also be tempting to purchase a policy with all the bells and whistles just in case. However, this is usually not prudent for most seniors either.
It is best to shop around when looking for the right LTC policy. It can be tempting to go with company A just because a good friend or family member also uses that company, but it is critical to do policy comparisons from multiple companies first. It is for your protection.
Take your time in reviewing offers
Once you get multiple offers, take your time in comparing them. Be sure to note the similarities and differences between policies to help you better see which come out ahead and which fall short.
Seek wise counsel
Before agreeing to or signing anything, go over the process with wise counsel such as a senior care agency.
If you have questions about LTC insurance or are considering purchasing a policy for yourself or a loved one, please reach out to Senior Estate Concierge today for more information.