Long Term Care Insurance
What exactly is Long Term Care Insurance?
A Long Term Care (LTC) insurance policy helps cover the cost of the 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 a long period of time. It can also include help for those suffering from a severe cognitive impairment such as Alzheimers disease. LTC is generally provided in the patient's home, an assisted living facility, or a nursing home.
Why Would I want Long Term Care Insurance?
There is a strong possibility that at some point in your life you will need Long Term Care. Long Term Care is expensive. The national average cost for a semi-private room in a nursing home is $70,000 annually. By 2030 that cost is expected to more than double. In most cases, health and disability insurance cover only a fraction of the Long Term Care costs.
Don't expect much help from Medicare or Medicaid either. Medicare pays for skilled care for a limited period of time and does not cover custodial care except some incidental homemaker services. Medicaid covers some long term care but not until you and your spouse "spend down" nearly all of your assets.
How Much Does LTCI Pay And For How Long?
The premiums depend on the benefit amount and payout period you choose. Typically I recommend policies that pay for 2-5 years and based on the current nursing care facility costs I recommend $160 daily benefit. The bottom line is this: If you want access to the highest quality care and don't want to trade the wealth you've accumulated over a lifetime to pay for the care, you need Long Term Care Insurance.