According to current trends, 50% of us will require long-term care at some point in our lives. For seniors over age 65, the likelihood is 70%. Medicare and Medigap health coverage do not cover nursing home care. Medicaid pays for long term care after we have used practically all our assets. So how do we pay for the costs of long-term care?
Some seniors have savings sufficient to cover the potential $50,000 to $100,000 yearly costs for long-term care. What about the rest of us? “I definitely feel that LTC [long-term care] insurance is the only insurance that will pay for itself,” says Wally Waldorf, Regional Vice President of Primerica, who offer Genworth Financial’s LTC insurance. LTC insurance has been around since the 1980s, and there are a variety of different policies that are available. Typically, policies pay a set dollar amount per day or per month for covered care during the benefit period stated in the policy. When shopping for LTC insurance, there are some key questions you need to ask.
1. How financially sound is the insurance provider? Given our current economy, make sure the insurance carrier will be around when you need them. You can check out the rankings of insurance carriers through A. M. Best or Moody’s.
2. For your proposed insurer, what is their history of insurance premium increases? Watch out for carriers who frequently raise premiums.
3. Does the policy have homecare coverage? According to Waldorf, 76% of Genworth Financial’s claims are currently for healthcare services rendered in the home.
4. Does the policy carry compounded growth benefits (inflation protection)? Ensure your coverage limits grow with the cost of living, or better.
5. Is there a waiting period (“elimination period”) before benefits kick in? The best plans use homecare benefit days toward the elimination period.
The older we get, the higher the insurance premium. Make your LTC coverage arrangements early, and save money in the long term.
