A 50 year old public-affairs specialist, Mr Bob has a good understanding of the need for long-term care life insurance. Part of the reason is his job with the Presidential Task Force on Employment of Adults with Disabilities, where those with disabilities term the rest of the population as the temporarily able-bodied. This is due to the longer life span and the very high likelihood that if people don’t die by the age of 50,60 or 70, they’re sure to require help.
Bob belongs to a population of almost 8.3 million Americans who’ve purchased life insurance for future long-term care as per the Health Insurance Association of America. LTC life insurance policy is their main concern. It may be a small figure when considering the current 35 million Americans over 65 years of age. Nevertheless it can safely be stated that in the next decade, the number of LTC life insurance policy holders will shoot up. Owing to the aging baby boomers an overwhelming 78 million Americans will be over 65 by 2025.
What exactly is LTC life insurance?
LTC life insurance is basically a life insurance that keeps you covered once you are not able to take care of yourself. Medicare covers you fully for 20 days only and only if you meet their criteria. On the basis of your life insurance policy, it could include expenses for nursing home, assisted living facility and/or home health care. With most life insurance policies, the service begins when you are not able to perform any two activities of daily living for at least the next three months, from among dressing, bathing, eating, moving from chair to bed, bathroom visits and remaining continent. Cognitive impairment like Alzheimer’s disease requiring extensive supervision can also activate benefits.
LTC life insurance may be expensive but its sales pitch can be convincing. While it may be depressing to imagine a future in an old age home, it can be all the more undesirable to know that this may also leave you or your loved ones destitute. Average cost of a nursing home per year is prohibitive at $66,153, as estimated by the Metlife Mature Market Institute. On the other hand, home health care can cost an average of $18 per hour.
The Agency for Healthcare Research and Quality maintains that there is a 43% lifetime chance for people beyond 65 of entering a nursing home. Of those that do, 21% will be for at least five years. So when deciding on purchase of LTC life insurance policy take all these into consideration and make sure you don’t get swindled.
In case you currently possess investable assets, excluding your home, worth more than $1.5 million to $2 million, it may be better to self insure instead of purchasing a life insurance policy. Or if you’re young and healthy with plenty of years before retirement, you may prefer to invest on your own. This is due to the fact that life insurance policies are not cheap and pay out only limited benefit.
Purchasing a LTC life insurance policy is not just a financial decision. Your family’s health history apart from alternative resources for care can make a difference. A wife may care for her ailing husband but will eventually end up in a nursing home for her own sake. With a good LTC life insurance policy she can be sure of getting the care she needs.