Before deciding what type of long-term care insurance (LTCI) is right for you, spend some time comparing the the amount of your policy & daily benefits with the average cost of care in your area. Long-term care policies may pay different benefit amounts for different services (such as $50 a day for home care and $100 a day for nursing home care) or they may pay one rate for any service.
When purchasing a policy, you will be able to select the benefit amount and duration of the policy to fit your budget and anticipated needs. Note that most LTCI policies have some type of limit to the amount of benefits you can receive, such as a specific number of years or a total- dollar amount. When considering the type of LTC insurance policy you need, ask if it pays for these 7 essential benefits:
1. Nursing home expense: Nursing homes provide a full range of skilled health care, rehabilitation care, personal care and daily activities in a 24/7 setting. Will your policy cover more than room-and-board?
2. Assisted living expense: Assisted living residences are apartment-style units that provide personal care and other individualized services (such as meal delivery) when needed. Many LTCI policies require you to meet a personal care requirement before approving the costs of assisted living.
3. Adult day care services: Does your LTCI policy cover health, social and other support services?
4. Home care: What percentage is covered for services such as bathing, grooming and help with chores and housework?
5. Home modification: As you age, your home may need ramps or grab bars. Will your LTCI policy cover these expenses to make your home safer and more accessible?
6. Care coordination: Make sure your LTCI policy covers services provided by a trained or licensed professional who assists with determining needs, locating services and arranging for care.
7. Future service options: If a new type of long-term care service is developed after you purchase the insurance, will you have the flexibility to convert to the new services? Check to see if your policy contains specific language about alternative options.
Finally, remember that you’ll have to pay the difference between the cost of the service and the benefit amount allowed. If you purchase inflation protection for your policy, you will maintain your full benefits even though the price of those benefits will increase over time.
THE TIME TO PLAN IS NOW
Despite government initiatives to raise awareness of the risks and costs of LTC, most people have taken no steps to plan and provide for their future needs. Why not? There are perhaps three reasons, first, denial – most people simply do not acknowledge their risk of needing LTC or the potential costs they face. The second is lack of knowledge, many individuals have misconceptions about the cost of care and how they can meet these future financing needs. And finally, there are those who are informed about their LTC options and have considered some of them but have not yet acted. In some cases, the complexity of products and the array of choices may keep potential buyers from reaching a decision. Many people assume, before they find out any details, that they simply cannot afford any of the advanced planning choices. This leaves most people without any type of LTC risk protection. If you are one of the 57% () of Americans that do not have a plan for LTC, book an appointment with us today. At Financial Consulting Group, Inc, we want to be your resource. Our experienced financial advisors take pride in our ability to help our clients simplify and improve their financial lives.
*Views expressed are not necessarily those of Raymond James Financial Services and are subject to change without notice. Information contained herein was received from sources believed to be reliable, but accuracy is not guaranteed. Information provided is general in nature, and is not a complete statement of all information necessary for making an investment decision.*
