|
The New Insurance—The Importance of Long Term Care
by Natalie CW Norman
We’re all familiar with life insurance, home insurance and auto insurance. Well now, it’s time we make ourselves familiar with a relatively new type of insurance—Long Term Care insurance. If you have a parent, you’ll want to take a close look at long term care.
Long term care refers to personal care provided by a friend, family member or a professional to someone who is doctor-certified as requiring assistance or supervision with 3 of 5 activities of daily living (ADLs), on an extended or permanent basis. ADLs are specifically defined as: eating, continence, toileting, bathing, dressing, and transferring in and out of bed.
Many consumers fail to distinguish long term care from medical/skilled care. Medical insurance covers medical care. It generally does not, nor was it designed to address, the personal care needs that arise from medical conditions/disabilities i.e, stroke, Alzheimer’s disease, or injuries sustained in accidents. Our chances of needing long term care insurance increase with age as our cognitive and physical facilities very naturally deteriorate. It is important to note that:
- Most private medical and major medical insurance plans do not cover long term care.
- Medicare covers some nursing home care, but for a limited time only.
- Disability insurance only replaces lost income.
- Medicaid pays only for nursing home care after you have spent most of your assets.
Long term care is not a product. It’s the service our grandparents and great-grandparents have traditionally received in their own homes at the hands of their spouses, children, and grandchildren.
Long term care insurance was forged in response to the changing family construct. The need/desire to work outside the home constrains many families’ choices about how and where their needy loved ones will receive care. Today, we commonly observe parents and children living in separate states. Families are also smaller. An only child may face caring for her aging parents and minor children at the same time. And guess what: a parent may not welcome his or her child’s help changing her diaper. People purchase long term care insurance to insure access to the type, style, quality and quantity of care they may require.
Most long term care policies cover care provided in a nursing home, assisted living facility, or a home. Having the option to receive or deliver care in one’s home is of great benefit to families. Millions of nursing home residents could be kept at home if only their loved one(s) could afford to hire an aide/assistant.
Insurance can mitigate or alleviate the need to exhaust one’s assets to hire an aide or pay for nursing home care. Having many care options affords families the flexibility to deliver optimal care to their loved ones.
You cannot purchase life insurance on your death bed; you cannot purchase long term care insurance after you come to need it. Who should consider long-term care insurance? Anyone who qualifies and can afford it. A financial advisor can help you design a policy to suit your unique needs/circumstances.
The national average cost for a private room in a nursing home is almost $70,000 a year. The national average for in-home assistance is $18 per hour, that is, $37,000 per year for 40 hours of help each week. The cost varies widely from state to state. Based on a 5 percent inflation rate, a year in a nursing home will cost over $100,000 in 2015. 40 hours of help per week in-home, will cost over $60,000. Long term care insurance can be expensive but not nearly as costly as needing it and living a long time without it.
Copyright 2006. Natalie Norman
###
About Natalie...
|
