What is Long-Term Care Insurance?
Long-term care insurance is a type of insurance designed to cover the costs of long-term care services that aren't typically covered by regular health insurance. These services include assistance with routine daily activities such as bathing, dressing, or getting in and out of bed. Long-term care insurance is particularly beneficial when you have a chronic medical condition, disability, or disorder such as Alzheimer's disease. Policies usually reimburse you for care given in various places like your home, a nursing home, an assisted living facility, or an adult day care center.
Why Long-Term Care Insurance Matters
Nearly 70% of people aged 65 and older will need long-term care services or support at some point in their lives. Regular health insurance doesn't cover long-term care, and Medicare only covers short nursing home stays or limited amounts of home health care when you require skilled nursing or rehab. Without insurance to cover long-term care, you'll have to pay for it yourself. Long-term care insurance is crucial to protect your savings from being depleted by the high costs of care. It also gives you more choices for care, ensuring you can access quality services that suit your needs.
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How Long-Term Care Insurance Works
When you apply for a long-term care insurance policy, you'll need to fill out an application and answer health questions. You choose the amount of coverage you want, and once approved, you begin paying premiums. Most policies stipulate that you're eligible for benefits when you can’t perform at least two out of six “activities of daily living” on your own, or if you suffer from dementia or other cognitive impairment. These activities include bathing, caring for incontinence, dressing, eating, toileting, and transferring (getting in or out of a bed or a chair).
Doesn’t Medicare or Medicaid Cover Long-Term Care?
While Medicare does cover some aspects of long-term care, it's limited to short nursing home stays or limited amounts of home health care when you require skilled nursing or rehab. It doesn't cover custodial care, which includes supervision and help with day-to-day tasks. Medicaid, on the other hand, can help cover long-term care costs, but only after you’ve exhausted most of your savings.
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How to Buy Long-Term Care Insurance
You can buy long-term care insurance on your own, through an insurance agent, or through some employers who offer group plans. After filling out an application and going through an interview process, you'll choose the coverage that fits your needs. Once approved, you start paying the monthly premiums.
Long-term care insurance is an important part of planning for the future. By understanding what it is, why it matters, and how to buy it, you can make an informed decision that best suits your needs and circumstances.