Do You Need Long Term Care Insurance?

Before you decide whether long term care insurance is for you, you probably are wondering what long term care is. Fortunately it's relatively easy to find answers to this question by searching on the Internet. Unfortunately, what you read about long term care may not be accurate, or maybe it's too confusing. Or worse yet, you're frantically looking into LTC insurance because suddenly you find yourself in a position of need and you just don't have time to really research and understand what LTC insurance covers or whether you even need it.

What is Long Term Care?According to Wikipedia, long term care is defined as, "A variety of services which help meet both the medical and non-medical need of people with a chronic illness or disability who cannot care for themselves for long periods of time." Basically, anyone who develops disabilities or chronic care needs resulting from conditions such as Alzheimer's disease and Related Dementia (ADRD), Parkinson's and other central nervous system conditions, stroke, broken hips or related Injuries (Osteoporosis, joint replacement, etc.) may be in need of long term care. In short, LTC is the care people need when they are unable to perform the activities of independent living such as bathing, dressing, toileting, continence, or eating. Additionally, LTC may be needed if the person requires care and supervision due to a severe cognitive impairment such as memory loss, dementia, etc.

What is Long Term Care Insurance?Long-term care insurance (LTCI) typically helps pay for the care you might need as the result of those disabilities as mentioned above. It covers personal care, homemaker services, skilled nursing care, and physical therapy. Care can be provided in a variety of settings as well, including:

• Your Home
• Adult Family Homes/Day-Cares
• Assisted Living Facilities
• Alzheimer's Facilities
• Nursing Homes

Depending on your policy and condition, varying amounts of care can take place in a variety of locations, and can range from a few hours of care per week at home to round-the-clock care in a nursing home.

The Basics of LTC and LTC InsuranceThere are three key things you need to consider when evaluating whether long term care insurance is for you:

1. Selecting the Maximum Monthly Benefit - this is the maximum amount of money the long term care insurance provider will pay you to receive care on a monthly basis
2. Selecting the Benefit Period - this is the maximum number of years the long term care insurance provider will pay your maximum monthly benefit
3. Selecting the Deductible Period - also called the "elimination period", this is the number of days between beginning to receive care and when benefits are paid

It's crucial to realize that these are the only required benefit selections for any long term care insurance provider; all other selections are optional. Make sure your agent helps you choose the right selections for you.

Although many of us tend to ignore the need for long term care, or simply hope that nothing happens during our lifetime, the fact is just about all of us will in some way, shape or form have an experience when a loved one needs long term care.

Still not sure about LTC insurance? Consider this:

• 12 million people currently receive long term care
• 82% are cared for at home or in Assisted Living
• Only 18% are in nursing homes
• 39% of those needing long term care are aged 18-64

The average length of care varies but regardless of how you look at it, even a year can turn out to be very expensive:

• Nursing home - 2.4 years   
• Home health care - 4.5 years 
• Life span of an Alzheimer's patient - 4.9 years

Most of us probably don't realize just how much long term care costs (if you had to pay by cash). Be prepared:

• Home health care runs about $18/hour = $66,000/year   
• Assisted living can cost $85/day = $30,288/year   
• Adult day care may be $55/day = $20,075/year 
• Nursing homes are expensive: $192/day = $70,080/year

Long term care insurance may not be for everyone, but everyone should consider it, especially as each generation continues to live a longer life. Let's make sure it's a happy one.