Well, there’s another insurance that should be on your “ To-Do List” that you probably haven’t given any thought to - Long-Term Care Insurance.
Why Long Term Care Should Be Part of Your Financial Plan
Today, one in five Americans older than 65, and half of those 85 and older need some type of help with everyday activities. Since women live longer than men, we are twice as likely to need nursing home care at some time. Long term care insurance offers solutions to how well you will live as you age, even in your own home and protects your retirement savings from being wiped out by the high costs involved if you must go to a nursing home or long term care needs.
What Sorts of Costs You Can Expect
Two visits a day by a home health aide to help with bathing, dressing and household chores has been averaged to cost more than $2,500 a month. If physical therapy or medictions are needed, the costs more than doubles.
Recently while investigating a home-care agency for a caregiver to come in 3 days a week for an hour to check on my mother, no bathing, dressing or household chores, it came to $36 per week. Not bad you say? Consider this, for the same 3 days and Suzy Homemaker type chores (sweep the floor, wash dishes and empty the trash) that $36 per week became $105 per week and she's in good health.
Want to get a rough estimate how much it costs in your area?
Look in the Yellow pages under Home Health Services or
Senior Citizens Services. Use my example as a starting
point and then add tasks as you go. You’ll be surprised at how much this little help can turn into a major financial problem very fast.
What about Medicare and Your Retirement Account?
Medicare generally does not cover long-term care. What it does provide is for short-term care in a skilled nursing home following hospitalization and limits coverage of help at home to those who need skilled nursing care and rehabilitative therapy. The length of time this coverage will last for help at home is less than 6 months.
Speaking before the Senate Special Committee on Aging March 9th, Malcolm Cheung, VP and actuary for Prudential Financial testified that nursing home costs for long-term care is averaging $69,422 annually for a private room or $61,116 annually for a semi-private room in a nursing home - your retirement account may run out when you need it the most.
What You Must Do Today
1. If you are still employed, check with your employer and find out if they offer a long term care insurance option.
2. Check with your renters, home owners insurance agent or accountant. There may be a rider or supplement to your current plan that is affordable.
What Kinds of Services Will Suit Your Needs?
This will take some thought on your part and communicating with loved ones. Your choice of services covered under a long-term insurance policy come in different flavors for different needs.
Services covered can range from simple assistance with daily living activities, such as bathing, eating, dressing or help with medications to 24-hour skilled nursing care. Some policies allow you to receive services in your own home, a community-based care facility, or a nursing home.
Other plans may cover respite care - temporary care so your mate or children can have a short break from caregiver duties. Don’t dismiss the importance of respite care. Doctors and nurses have been known to suffer from burn-out, an at-home caregiver, no matter how loving or compassionate, needs time to recharge to prevent the same kind of burn-out.
Check whether your plan will also cover home modifications, such as ramps, railings, hospital beds and other assistance you may need.
Recently, many states began providing tax credits or deductions from state taxes for long-term care insurance premiums. To date, 21 states offer these incentives. To find out if your state is on the list Check Here.
Getting Started
First, think about what types of services you might likely need. This isn’t as difficult as it may sound if you are closer to 60 than 40. I’ve provided a link to a list of questions you can use to help get the information you need from your agent. Thanks to American Council of Life Insurers for this valuable resource: Pdf Checklist. Below are some helpful tips to get you started.
Long-Term Care Insurance Buying Tips
*If remaining in your own home is important to you, make certain your insurance plan will cover at-home care.
* Ask for outlines of coverage so you can compare the features of several policies.
* Make sure you fully understand what the policy covers. Call the agent or insurance company if you have questions.
* Check that the company is licensed in your state. Look for a company that is reputable, consumer-oriented, and financially strong. A number of insurance rating services rate the financial strength of companies. Two well respected rating companies are A.M Best and Weiss Ratings
* Always answer questions about your medical history and health carefully. Take the form with you to your doctor if you aren’t sure.
* Be sure your application has been filled out accurately. Promptly notify your agent or the company of errors or missing information.
* Always check the date the insurance becomes effective and any pre-conditions that may apply.
* Best to ask before you sign on the dotted line, but definitely after you have purchased your policy, check for the grace period. This is your "free-look" -- usually 30 days after you receive the policy -- when you can change your mind.
*During any “free-look” period, read your policy carefully. If there is something there you don’t understand or was not made clear when talking to the agent, call your agent immediately. Don’t wait.
* Consider having the premium automatically taken out of your bank account, so you won't lose coverage if an illness or accident prevents you from paying your premium.
What To Do If You Have Any Problems
* For a complaint about your insurance agent or company, contact the customer services division of your insurance company.
* If that doesn't work, find the contact number for your state agency Here.
Finally, when you purchase a policy, make your check or money order payable to the insurance company, not the agent. Be sure to get a receipt. Do not pay with cash.
That's all for now but I'll leave you with this
It's better to have and not need than to need and not have! My Grandmother
