7 essential details concerning long-term care insurance

Assistance with medical or personal requirements for a prolonged period of time is referred to as long-term care. A concern that affects practically every home, long-term care will be required at some time in the lives of nearly 70% of adults turning 65 today. And even though a large number of individuals will require long-term care, not everyone uses long-term care insurance to cover the costs.

However, long-term care comes at a high cost, and many people are unable to pay the full amount out of pocket. Extended daily care is not often covered by traditional employer-based health insurance, and in general, health insurance only covers doctor and hospital expenditures. The costs of long-term care requirements may be partially mitigated by long-term care insurance (LTCI). You may use these 7 criteria to decide if you should pursue LTCI as you make financial plans for the future.

1. A variety of settings are covered by long-term care insurance

Most people picture nursing homes when they think about long-term care. But 73 percent of those receiving long-term care live at home, not in nursing homes or assisted living facilities. 2

When a person is unable to do everyday tasks like dressing, eating, bathing, or moving, they require long-term care, which is frequently offered in the patient's own home by a home health aide. Even while it's not always nice to consider situations in which long-term care will be required, LTCI can assist in covering the costs. It could provide a means for you to get care at home rather than in a nursing home or assisted living facility.

2. Long-term care insurance can help with the gaps in care.

If long-term care becomes essential, it is hard to say with certainty if your family would be able to take care of you. It may be extremely expensive and emotionally taxing to provide care. Furthermore, 66 percent of carers ultimately utilize their own retirement and savings assets to pay for care due to the high expense of long-term care. 3 Additionally, the practicality of caregiving might not be possible if your family members live far away or are unable to balance it with their own job or family commitments.

3. Medicare does not cover as many medical expenses as long-term care insurance

Long-term care is often not covered by Medicare, and it only sometimes pays for the care given at home. When you are recovering from a hospital stay for a related ailment, Medicare does pay for skilled care in a nursing home for brief durations (up to 100 days), but it is not the same as long-term care. Medicare won't cover such expenses after your care requirements have stabilized and you require personal or custodial care.

4. You'll probably require some kind of long-term care

The likelihood that a 65-year-old will require long-term care services at some point in their lifespan is 70%. 1 It's challenging to predict whether or not you'll require long-term care because it may be necessary for a variety of different reasons. Instead of waiting until you're sick or older, when it could become costly, to get an LTCI coverage, it's preferable to do so when you're still in good health, which is typically in your 50s. Your rates will be cheaper the younger you are.

5. You might not have enough money saved to pay for the long-term care you require

Long-term care comes in many forms, from assistance with daily tasks and activities to total care in a private nursing home room. The average annual cost for a semi-private room in a nursing home is $94,900, and the average annual cost for an assisted living facility is $54,000. 4

Your retirement assets might not be sufficient to pay these fees given the rising price of long-term care.

6. Long-term care insurance has a range of prices

Your age and the amount of coverage the insurance will provide in the event you need it will both affect pricing. For example, according to the American Association for Long-Term Care Insurance, a couple that chooses an initial insurance benefit of $165,000 and is both 55 years old will pay a joint yearly premium of $2,080. The cost would increase to $3,750 a year for a couple who are both 65 years old. 2

7. Various long-term care insurance packages are offered

Traditional LTCI policies typically pay a set sum for each service, such as $100 per day for nursing home care. Usually, the benefits you are eligible for are subject to a cap, either in terms of years or money. A pooled benefit plan will establish a total cash value for the numerous services you get if it includes more than one form of long-term care. Beyond the conventional "use it or lose it" kind, new LTCI policy varieties are becoming more and more common, several of which have seen premium rises.