What is Long Term Care Planning?

Have you been a caregiver for a loved one who did not have insurance to pay for long term care and they relied solely on you for help? Did it impact your health, your lifestyle, or income?  Would you have preferred that you could supervise the care instead?

Throughout their working years most people look forward to a long life, dream of what they want to do when they retire, and save with hopes that it will be a worry-free time for finances. However, while budgeting for retirement many people forget to account for one of the most important aspects of this special time in their lives: their long term care.

First, it is important to understand what long-term care really entails. Long term care can be categorized as a variety of services that help people when they are no longer able to care for themselves, regardless of age. The care is provided over an extended period of time and may be medical or personal. Medical care deals with the actual administration of medicinal services. While personal care involves basic life functions referred to as “Activities of Daily Living” (ADLs). ADLs include assistance with such things as bathing, dressing, feeding, transferring (i.e. moving from chair to bed), toileting, and continence. Long-term care also includes assistance with cognitive impairment to protect from threats of health and safety. The truth remains that seven out of ten people who reach age 65 will require some level of care services at some point in their lives (1). However, don’t let the myth that long-term care means a complete loss of independence and control over your life scare you. The fact is that with proper planning, long term care costs can be addressed effectively ensuring maximum independence and control.

So where do people receive long term care and how much does it cost?

Long term care is provided in a variety of places such as the home, adult day care, assisted living, and in nursing homes. Yet, the majority of care is usually provided in the home. Most of my clients purchase long-term care insurance so that they have a choice as to where they receive care when the time comes.

Take a moment to find out what the cost of care is in your area and when you may need care 

Of these costs, how much are you willing to write a check for from your retirement income? If it is not the full amount of the cost of care and your health qualifies, long-term care insurance may be an option to pay the remainder.

Many people wonder if their health insurance pays for long-term care services and the reality is that it does not. Health insurance covers skilled care, such as doctors, nurses, and diagnostic services. Meanwhile long term care covers custodial care.

Long term care insurance premiums are based on age and health at the time of application. Plan designs and solutions are tailored to the preferences and finances of the applicant.

Benefit selection includes the following options:

· Benefit period– Minimum amount of time the policy will pay benefits for care

· Daily or monthly benefit amount- Maximum amount the policy will pay for care per day or month

· Elimination period- The period of time when care is needed before the policy will pay for care

· Inflation- The method to increase the benefit to keep pace with increasing cost of long term care costs

Planning ahead does make a difference. Premiums are lower the younger your age and better your health, therefore the consequences to your family are minimized. By securing your retirement with long term care insurance, your family members can supervise your care rather than providing it themselves, thus easing the burden on them and giving you the control over your own care.

Source:

(1) 2016 Medicare & You, National Medicare Handbook, Centers for Medicare & Medicaid Services, September 2014.