This type of insurance reimburses you for a variety of daily long-term healthcare expenses, such as home health aids, assisted living or skilled care in a nursing home. As with term life insurance, policyholders purchase coverage for a fixed time period. Three-, four- and five-year policies are the most popular, but you can purchase coverage for as little as one year or as long as 10 years. No-cap policies are also available.
Who purchases long-term care insurance?
Demand for long-term care (LTC) insurance has increased dramatically due to the growing number of adults over 60 and the rising cost of skilled nursing care. Statistics show that the average cost to stay in a nursing home for one year is $87,000. According to industry groups, some 8 million Americans have active LTC policies, which pay about $6.6 billion in claims annually. The majority of consumers who purchase these policies are between the ages of 55 and 64. However, more folks in their mid-40s and early 50s are shopping for insurance now to secure lower premiums.
Long-term healthcare options
Being well informed on the many long-term healthcare options is the first step in determining what coverage is right for you. Weigh the options before you decide on what plan is right for you.
Most individuals and couples purchase long-term care insurance to cover on-going medical costs and protect their estates. In the past, many people had to give up all of their assets to enter nursing homes. With long-term care insurance, most people can keep their homes and preserve their estates for future generations. There are out-of-pocket expenses however. To maintain the policy, you must pay annual premiums for the rest of your life. If you need skilled nursing care, you will have to pay for a portion of your expenses. For example, if your policy pays $150 per day for long-term care and your private room costs $246 per day, the policy won't cover everything.
Before you purchase long-term care insurance, take time to review answers to FAQs and to familiarize yourself with the specifics, such as waiting periods, split coverage for couples, LTC riders and partnership policies designed for people who can't afford insurance but don't qualify for Medicare or Medicaid. Most importantly, you should compare a number of premiums and select a policy from a reputable, financially stable company. Request a personalized quote today to get started.