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Protect Your Retirement Nest Egg with Long Term Health Care Insurance
The need for long term care (LTC) could be brought on by many things: a slip and fall, post-surgery recovery time, or a general reduction in one’s ability to take care of oneself either due to age or disease. The cause that necessitates long term health care plans could result in many different types of care being needed. Generally, the types of long term health care plans required are broken up into two categories:
Skilled care is care that must be given by a doctor or nurse because it is of a skilled and medical nature.
Non-skilled assistance is long-term care that focuses on helping patients eat, dress, use the toilet and conduct other activities of daily living.
Medicare will pay for most short-term nursing home or nursing facilities that provide skilled care. They do not pay for long-term stays or any care that consists of non-skilled assistance. This means assisted living facilities, adult day services, many home health care services, and nursing home stays longer than 100 days are not paid for with your Medicare coverage. Unfortunately, that leaves a lot of seniors out in the cold.
The best way to ensure that you can get the proper care as you age without sacrificing quality, comfort or your retirement savings is to invest in a Long Term Care policy.
Long Term Care Policies
LTC policies may be tax qualified or non-tax qualified. Tax qualified policies generally begin paying long term care expenses once you are unable to conduct at least two daily activities without standby or hands on assistance. Non-tax qualified policies may require the impairment to occur in only one activity. In both policies, a cognitive impairment takes precedence over a physical impairment. Having a qualifying need for the use of your policy does not guarantee immediate payment of benefits since most Long Term Care policies have a waiting period, also called an elimination period. This means that you will pay out-of-pocket for the first 30 to 180 days before your policy starts paying. The longer your elimination period is, the cheaper your Long Term Care policy will be.
Although many people refer to it as, “Nursing Home Insurance,” Long Term Care policies are actually very flexible in terms of the care coverage offered. Some policies cover home care and assisted living care as well as nursing home care. Each policy has a daily maximum benefit allowance, so it is important to make sure that the type of care you choose stays within that allowance—or that you are comfortable with the out-of-pocket expense. Like the elimination period, a lower daily benefit will also help to reduce your premiums. Because the cost of nursing home care is continually rising, many Long Term Care Insurance policies also include an inflation rider that increases your benefit annually to combat inflation.
Another important benefit to consider in your Long Term Care policy is whether or not it carries a premium waiver. A premium waiver allows the premium for both spouses to be waived when one goes into care.
One last consideration is the insurance company you choose to buy your policy from. Because it may be ten or more years before you utilize the policy, it is important to choose an insurer who has been in the business for a good number of years and is highly rated by A.M. Best and Standard & Poor’s. Enjoying a comfortable, asset-retaining retirement is important to every senior; buying a Long Term Care policy with a reputable insurer is the key to getting it.
For your reference, the following is a well known LTC company:
- GE Capital Assurance Company (who is now Genworth GE Life and Annuity Insurance Company)
(Note: 1sthealthinsurancequotes.com does not recommend or endorse the above company.)