Long term care insurance can be defined as an insurance coverage that, under specified conditions, provides skilled nursing, intermediate care, or custodial care for a patient (generally over age of 65) in a nursing facility at his or her residence or in a nursing home following an injury.
It is a type of medical insurance but with a difference. It is aimed to cover expenses incurred by senior citizens for their long term medical or other needs in home or in nursing home. In the United States long term care insurance helps to provide for the cost of long-term care beyond a pre-determined period.
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Long term care insurance is usually provided for patients who cannot take care of themselves as they suffer from any disability or because of their prolonged illness. It ranges from providing personal care at home, such as bathing and dressing, to skilled nursing services in a nursing home.
Need for long term care insurance
It is a general fact that medical expenses increases as a person gets older and for a retired person who doesn’t have a steady source of income it becomes a very hard task to make ends meet. Hence a person needs more funds at that age to be able to carry out treatment for ailment which is natural at an age above 65. In a recent study it was found out that one out of two women and one out of three men above sixty five years of age will require medical care at nursing home or at home at some point in their lifetime. Hence it has become essential to provide for a long term care insurance policy to meet contingencies in the future.
Who should take up long term care insurance?
Long tem care insurance is a very expensive proposition. Hence even though it is a brilliant idea to have one but it must be borne in mind that the policy must not cause financial hardship or sacrifice other financial needs. It is actually suitable for those persons who have appropriate assets but want to preserve them for future generations or doesn’t want to be a burden to their family members at an old age. One should never opt for long term care insurance in case his budget is stretched while paying for utilities, food or medical assistance.
When to buy long term care insurance?
It is always advised to plan and provide for long term care insurance at a young age. It is because the premium for this policy is much lower than at an old age. Usually long term care insurance premiums are based on age at the time of purchase hence the annual premium for this policy increases as you grow older. For e.g. If you buy a long term care insurance policy at 55 years of age a policy that cost $800 per year, you will continue to pay the same premium. However, if you don’t purchase at 55 years and wait till you are 65 years old the same policy will cost you $1,700 per year. Hence it is always recommended to go for life care insurance at a younger age as the premiums usually stays level each year as you age.
How to buy long term care insurance?
• It is recommended to take quotes from at least three leading insurance companies who are in business for at least 10 years.
• Compare the benefits being provided by the policies offered by them
• Compare the premium amounts of the different policies
• Analyze your financial capability before taking the plunge
• Decide on the policy that suits you from all aspects.
Benefits of long term care insurance
It is important to study carefully the benefits that are offered with long term care insurance policy as there are no standard benefits of the policies as such. Usually the benefit varies with policies that provide different combinations of benefits and coverage. However the New York State in the United States of America has provided minimum standards for insurance policies providing for long term care and classified the policies as under:
• Long Term Care Insurance
• Nursing Home and Home Care Insurance
• Nursing Home Insurance Only
• Home Care Insurance Only
Exclusions
Long-term care insurance mostly excludes the following diseases:
• Mental and nervous disorders, other than Alzheimer
• Addiction to drugs and alcohol
• Injuries or illnesses caused by war
• Treatment paid by the government
• Injuries or deaths
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