Long Term Care
While aging is inevitable, the process need not be an uphill battle. An increasing number of elderly Americans are finding peace of mind through long term care insurance, which offers services not provided by Medicaid, Medicare, or standard
insurance. There are currently more than 7 million long term care policyholders in the U.S., and experts estimate that 60% of Americans will need some form of extended assistance in their lifetime. With the +85 age group constituting the fastest-growing segment of the population, a rising demand for a long term care insurance plan is in the forecast. Whether it is recovery from surgery, chronic pain, dementia, a terminal medical condition, a permanent disability, or a need for supervision, a long term care plan addresses a wide range of patients' emotional and physical needs. It provides numerous services including the following:
- Administering prescriptions
- Aiding in the use of the restroom
- Assisting with medical needs
- Assisting with personal grooming
- Bathing
- Cooking
- Counseling
- Drafting letters
- Dressing
- Driving
- Feeding
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- Helping with pain management
- Housekeeping
- Managing finances and paying bills
- Offering assurance and comfort
- Preventing dangerous behavior
- Preventing wandering
- Providing occupational or physical therapy
- Running errands
- Walking
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The most common settings where
long term care is provided are as follows:
1. Insured's home
2. Nursing home
3. Adult day care facility
4. Hospice
5. Assisted living facility
6. Home of a friend or family member of the insured
Depending on the underlying condition, long term care coverage may only be needed for a short period of time ranging from weeks to months or for years. Before taking out a long term care insurance policy, prospective purchasers should answer the following key questions:
1. Amount of out-of-pocket expenses you can afford to pay for long term care
2. Amount you are capable of paying for long term care coverage
3. Ability to satisfy the premium when you retire or find yourself on a fixed income
4. Types of services that best correspond to your personal preferences and needs
Benefits typically kick in when the insured is unable to perform, at minimum, two basic daily chores, such as dressing or bathing, or is suffering from dementia or Alzheimer's. The policies of different long term care insurers cover different services. Therefore, it is essential that prospective policy owners scrutinize the different long term care policies' provisions to ascertain which one is most suitable for their situation. Since comparing policies is challenging even for savvy consumers, it is advisable to solicit the services of an experienced insurance agent or financial planner. An optimal long term insurance policy offers a generous choice of options, ensures an adequate financial benefit, requests a reasonable deductible, and provides a safeguard against inflation. To choose the right long term care carrier, consumers should focus on companies that are financially strong and that offer stable rates. To obtain long term care insurance, applicants must complete a questionnaire concerning their health or receive insurance quotes from insurance agents and providers.
Consumers should also find out the long term care policy's limits on and exclusions of benefits, the most common being as follows:
1. The Policy's Maximum Benefit
This is the dollar limit or the length of time for which the insurer will pay benefits. Generally, policy benefits have a dollar limit, lifetime benefits or a maximum ranging from one to ten years. Coverage may be either unlimited or for a fixed number of years. With some policies, the maximum benefit varies depending on the benefit or is different for each period of care (i.e. consecutive days at a nursing home)
2. Waiting Period
This is the duration of time that a policyholder is required to pay for the care before being able to avail himself or herself of the policy's benefits. Some long term care policies set a new waiting period for separate periods of care.
3. Pre-Existing Condition Restriction
There are long term care insurance providers that impose a waiting period prior to paying for care associated with a pre-existing condition.
4. Exclusions
Common exclusions include (1) most forms of mental illness, (2) drug abuse and alcoholism, and (3) intentionally-inflicted injuries.
5. Daily Benefit Amount
The majority of indemnity policies pay for long term care up to a specific amount per day, or the daily benefit amount. Any charges exceeding this limit is the insured's obligation.
Most long term care insurance policies offer comprehensive coverage and annual, semi-annual, quarterly or monthly payment plans for the insured's life. Both individual and group long term care insurance is available in the marketplace. Association groups and employers usually offer group term care insurance to their members or employees, respectively. Premiums for long term care depend on a variety of criteria such as age, duration of the benefits, health rating (sub-standard, standard or preferred), and the monthly or daily benefit. A long term care policy is only available for certain age groups and is generally cheaper for younger ages. A longer waiting period lowers the cost of the premium. Long term care policy premiums may qualify for an income tax deduction.
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