Long Term Care Insurance
Do you know how you could protect yourself from possibly the greatest financial risk you will face after you retire? Just imagine how relaxed you will feel because you planned ahead and are protected from financial problems in retirement.
Baby Boomers are reaching retirement age; Americans are living longer than ever. These are facts which make, that Long Term Care Insurance (LTC) policies start to be on the minds of people, both the older ones and their chidren.
People who are shortly before retirement, and their kids who see that their parents will not be able to care for themselves forever are looking for the protection a Long Term Health Care Insurance can provide.
What is covered by a Long Term Care Insurance:
- Support for daily activities (bathing, eating, dressing)
- Skilled nursing care or rehabilitation training (in a nursing facility or at home)
- Care in cas of cognitive problems such as i.e. for an Alzheimer's patient, but not curative measaures.
Who usually pays for Long Term Care (LTC)?
Some people think that Medicare, Medicaid or their additional health insurance will pay for all their Long Term Care costs, but consider these facts:
- Medicare has strict eligibility requirements for skilled nursing care only and is for a very limited time period. There is no true long term care from Medicare.
- Medicaid is a welfare program. Therefore it will NOT cover long term health care costs for the average American, it might kick in once you have lost your fortune...
- Straight health insurance and medical supplements DO NOT cover nursing home care. You need and additional insurance for that.
- The fact is, that individuals and their families with their savings, their assets, and straight cash pay most of the Long Term Care costs - unless they previewed and have a Long Term Care insurance which takes over these costs.
The Reality on Long Term Care Insurance
- The New England Journal of Medicine recently contained a report that about 49% of people who are 65 old and older will need long term care assistance before they pass away.
- The Wall Street Journal, in an article, states that almost half of all seniors 85 years old and older have Alzheimer's or some form of dementia. Dementia is the number one cause for needing long term care.
- The Harvard Magazine reports: People are living longer with men living 80.9 years and women 84.5 once they reach age 65. Modern medicine is keeping people alive much longer. The downside of this longer life ist, that most old people will need long term care before they die.
The average U.S. citizen is living longer because of better medical care, therefore it's also more likely that a person will need long term care insurance to provide assistance. Cognitive illnesses like Alzheimer's, Dementia or other degenerative amd partially disabling diseases like Diabetes, Stroke, Heart problems, Cancer, and Parkinson's Disease will make them dependent on long term care at some point in their lives.
The term Long term care designs a service provided in a facility like a nursing home - Assisted Living Facility or home health care when the nurse or aid will come into the person's home a give care.
Long Term Care is very often not skilled care but rather custodial care, help with every day activities of daily living (ADL's) such as eating, bathing, dressing, transferring, toileting, and maintain continence. If you have Long Term Care Insurance most or all of your LTC costs will be paid for, depending on which policy you buy.
Consider the average annual cost to receive long term care, this can very quickly becoem a major financial problem:
- Nursing Home - 75 000 Dollars
- Home Care - 29 000 Dollars
- Assisted Living Facility - 38 000 Dollars
(these are actual figures from May 2007, according to an official at Genworth Financial's Long-Term Care unit in Richmond, Virginia.)
These high care costs can wipe out your retirement savings very quickly.