Long-Term Care Insurance: Is It Right For You?

Almost every one of us, at some stage of our life, will reach a point where we need the aid of skilled healthcare professionals for an extended period of time.

A chronic illness or the need for assistance with daily activities such as bathing, dressing, medication management and meal preparation are common reasons for long-term healthcare. That kind of care, the care normally associated with assisted living or being in a nursing home, comes with a cost that most standard health insurance plans do not cover.

Long-term care (LTC) insurance can offset those costs. LTC policies are designed to cover the expenses from a nursing home, in-home-care and other medical costs are not covered by Medicare. When you weigh the annual out of pocket expenses for long-term care (AARP puts the number at $140,000 at age 65), the benefits of LTC insurance are considerable.

However, policies can be confusing and very few of us have them (according to the AARP, a little more than seven million people carry LTC insurance). Having LTC insurance can provide you and your loved ones peace of mind without worrying about the financial burden. But you need to be informed.

Before thinking of purchasing LTC insurance, you and your family should ask questions, such as:

• Where do you stand financially? The cost of plans can increase yearly and the coverage or benefits can change.
• Do you have access to LTC insurance through work?
• How is your health? Premiums can be higher depending on your health and some plans will deny someone with a pre-existing medical condition.
• Do you plan to move? Restrictions on the nursing homes where you can live or the inhome care you have access to may limit your options.
• What is covered? And what are the restrictions? Some policies may cover nursing homes, but not home modifications.
• What are the benefits (the daily allotment for care) and how does that compare to healthcare costs where you live?

According to American Association of LongTerm Care Insurance, the average yearly premium for LTC insurance for a 55-year-old person is $2,007. But rates can vary widely based on variables that include your age and insurance carrier.

The best advice when considering LTC insurance is to be as informed as possible. The state has a good resource page where you can get information (nh.gov) and the National Association of Insurance Commissioners has a pretty thorough fact sheet (naic.org) that is helpful.