It is never too late to think about long term care, although you probably will not be thinking about it at thirty! There are, however, several things to research before purchasing a long term care policy.
When IS the right time to consider a long term care policy? When you think it is. Typically, one can tell by 50 what the rest of life looks like –health and family wise, and most important, financially. Only you can determine if a long term care health insurance is right for you.
On average, it is recommended that you look into long term care while you are still young –and for those thinking that 55 isn’t young, think again! It is probably a time when the kids’ college is mostly paid for, paying off the house is actually something you can visualize happening, retirement maybe at sight, and you finally have a grasp of your budget for retiring.
The decision to get a long term care policy will also depend on how you would like to receive care should you ever need it, and if you want to keep your independent lifestyle while protecting the assets you have been building for your entire life.
Is a long term care policy affordable? It all depends on what your monthly expenses are. If, for example, at 55 you become an empty-nester, then chances are you will be able to afford it. And again, research is key. Find out about the costs of care in your area, and balance it out with the estimates of your retirement, social security and Medicare. “It is all about creating a financial strategy that takes into consideration your personal finances at that specific point and circumstances in your life”, comments Susana Krieger; an insurance professional for the past 20 years. “It really boils down to whether you qualify and can afford it”.
When considering long term care, she recommends:
Start by researching the costs associated with a long term care facility and an in house care service. On average, a long term care policy premium can range between $2,800 to $8,000 per year. Factors such as gender, type of care (comprehensive long term care, nursing home and residential care or home care only), tax status and age (the younger you start, the better!) all play a role in the cost of your policy. Other factors considered include health financials (the longer benefits can be covered the lower your insurance), additional health services that might be required and how much care you think will be needed.
Study what your finances will look like in the short, mid and long term. Include your family history of health conditions, such as Alzheimer’s. Typically, the average length of care is between 3 and 4 years, so history of any illness that requires additional care will play a role in determining what kind of policy best suits your needs.
Understand the jargon used in the insurance policy and the differences between the triggers in the insurance contract; for example, the ‘elimination period’ refers to the time the policy holder waits before the policy kicks in – typically 90 days. Many view it like a deductible, since the responsibility of paying for care lies with the policy holder for however long the elimination period is, depending on the type of policy you purchased.
You will have two options for the elimination period: calendar day and service day. Calendar day policies count the days that you pay for care consecutively, while service day policies count only the days you actually paid for and received care services. So if you only submit proof of care for the weekends exclusively, 90 days can stretch into an awfully long period of time!
When does a long term care policy take effect? The insurance company will confirm with your doctor the overall status of your health and when you can no longer do 2 out of 6 activities of daily living. These encompass bathing and dressing yourself, preparing your meals, toileting (taking care of your person), continence, and being able to get from one place to another (transferring). You will be able to start your long term care claim once the elimination period is over.
What happens if I have a pre-existing condition?
First of all, it depends on the condition. Some pre-existing conditions are not considered a risk for long term care. And even if the condition IS considered a risk, you still have options. Although not as comprehensive as true long term care policies, there are plans that still allow for varying levels of protection.
When discussing long term care insurance, be sure to get answers to ALL of your questions. The questions discussed above are the most common, but you may have others. Look for an insurance professional with plenty of experience in all facets of long term care, including the different options. In other words, an insurance professional who will help you craft a long term care plan that PUTS YOUR NEEDS FIRST!