Deciding whether long term care insurance is right for your family is a very personal decision. Over the course of my mother’s battle with Alzheimer’s, I became a strong believer; before that, to be quite honest, I hadn’t given the topic a single thought. In today’s guest post, Barbara Davis helps us understand the basics and provides tips on getting started if you’re ready to take the next step.
As the baby boomer generation continues to age, families are feeling the pinch that comes with providing funding for the care their family members need. This coupled with the difficulties that accompany watching a family member age or live with a disease such as Alzheimer’s can only worsen the sting. What are some ways you can help your family prepare for the future wisely?
What is long term care?
Long term care is care that is anticipated to last a, no surprise, long time. It is generally broken down into two subcategories—ADLS and IADLS
ADLs are “Activities of Daily Living” and include support for bathing, incontinence management, toilet use, and eating. ADLs comprise the core spheres of long term care and should be covered by every long term care provider.
IADLs are “Instrumental Activities of Daily Living” and generally include support for scheduling and setting up appointments, pet care, and emergency medical contact when needed. These services are also crucial for the elderly and those that experience other health complications and degenerative diseases like MS, Alzheimer’s, and Parkinson’s.
Having a long term care provider is critical for the well-being of many in our community, but it comes at a cost—a high cost. This high cost, on top of other mounting expenses associated with aging and care of family members is often prohibitive and lands many folks with sub-par care, possibly endangering their lives. Although Medicaid and Medicare provide some relief from the cost, it will not take a sizeable chunk out of the estimated monthly cost of over $3,000 per month for qualified long term care. This is where long term care insurance comes in.
What is long term care insurance?
Long term care insurance is a kind of insurance that provides funding for, you guessed it, long term care. It works much like any other health insurance policy with rates being set according to a variety of risk factors. Long term care insurance customers receive payment from the insurance provider to ameliorate the cost of this expensive care, providing peace of mind for the care-receiver and the surrounding caregivers.
Long term care insurance comes with two options—Tax Qualified and Non Tax Qualified. Tax Qualified benefits are non-taxable, but the beneficiary has to prove that they are unable to perform two or more standard tasks of basic living for over 90 days in order to qualify. Non Tax Qualified policies are subject to tax, but are only contingent upon a medical “trigger” in order to be paid from. These are important distinctions to keep in mind when exploring long term care.
Those with pre-existing conditions might not find it worth their while as the premiums and associated costs may get prohibitively expensive, but for currently healthy individuals who may have high risk factors and want to protect their future, it is an excellent investment and could relieve your children of a great financial burden.
A good way to explore whether or not long term care insurance would make sense for someone in your family or circle of friends is to get a quote to estimate your costs and see how much of your policy will actually get into your hands so you can pay your costs.
Going to helpful sites that let you compare different options for long term care can play a large role in determining if long term care insurance policies are right for your family. Long term care is going to be a reality for the lives of many; make sure to not be caught off guard and provide the best possible protection for your family for now and for the future.
Barbara Davis is with LTC Tree, an organization that empowers families to explore long term care insurance options that are right for them.