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Planning > Insurance > FAQs about Long Term Care Insurance

What is Long Term Health Care? | return to questions | return to top

Long term health care is the general term applied to the cost of care to assist us with those things we do everyday. Known as "activities of daily living," these include dressing, toileting, eating and mobility.

Long term care is often needed as we suffer illnesses, memory loss or from of the affects of aging. This care can be provided at home, in an assisted living facility or a nursing home.

How is this paid for? | return to questions | return to top

Most long term care is paid for out-of-pocket by the person who needs the care, or by their family members. A very small percentage is paid for by Medicare, and if one is indigent, Medicaid will pay for some care.

Long term care insurance is increasingly being seen as the preferred answer. Also, with long term care insurance, you can control when and where services are provided.

How many people need it? | return to questions | return to top

Because of the number of people who receive care in the home, provided by family members, it is very difficult to provide statistics. It is generally agreed that a person has about a 45% chance of incurring a need for long term care in his lifetime, and a married couple has almost an 80% chance of ONE of them needing care.

Statistics unfortunately lead us to the conclusion that it will be "the other guy" who has the problem. Rather, take a look at those around you who are in need of care -- this is much more compelling than a number.

What about my family's health history? | return to questions | return to top

Family history should only play a role if you are NOT doing what you can to live a long life.
I.e., if there is a history of cardiac problems, most people do whatever they can to outlive their predecessors.

The inevitable consequence of a long life is that as we become frail, our need for care increases. In addition, the diseases and illnesses that were fatal in the past are now often treated as chronic problems in today's world, again requiring care.

When and how should I consider long term health insurance?
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Long term care insurance is an answer to the potential need for long term care. As with most types of insurance, you are transferring your own out-of-pocket risk to an insurance company.

Any insurance is going to be less expensive if the existing risk is less, thus the younger and healthier you are, the better the rate. Premiums do rise substantially beginning when you are in your 60s, so again, the earlier the better.

There are many long term care insurance carriers, make sure you consider only those carriers with a long history and solid financial's. You should also work with an accredited independent agent in your area.

Can I add coverage as time goes on? | return to questions | return to top

Yes, you can purchase additional coverage in the future, as long as you qualify.

Most policies sold today have an inflation element applied to the base coverage to keep up with the ever-increasing cost of care.

The best advice is to buy a policy with the presumption that you will need additional coverage in the future and that you won't be able to qualify for the new coverage at the time.

What other variables should I consider? | return to questions | return to top

Long term care insurance is a risk management tool. Most people simply are not prepared to take on the usually significant out-of-pocket cost of long term care in their retirement years.

Long term care insurance also provides other benefits, including freedom for the caregivers and greater flexibility.

Two of the biggest reasons folks go into a nursing home are...

a.) the cost of care at home and
b.) the wear and tear on the caregiver.

Long term care insurance can help solve both of these problems.

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