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While health insurance covers items like the treatments and prevention of health problems, coverage is often lacking when it comes to long-term care needs. Long term care insurance helps make up the difference where health insurance coverage lacks when facing the high costs of items like personal or custodial care. This includes services that are performed in a home setting or in a facility like a nursing home.
Long term care insurance reimburses the owner of the policy for daily care services when they can no longer perform them on their own, whether due to age, injury or illness. This typically includes help with daily activities like eating, bathing, toileting, dressing and regular medical care or medical observation.
While federal programs like Medicare will sometimes pay for long-term care services, there are limitations. Generally Medicare will only pay for qualified short-term services up to 100 days, and will only pay a portion of the total expense after the first 20 days. Since many people who develop the need for long-term care require these services for indefinite amounts of time, purchasing a long-term care plan can end up saving the member and their family a large amount of money if they end up requiring additional care.
Benefits and Coverage
The majority of long-term care products on the market today are comprehensive policies. Each policy provides what is called a daily benefit. This benefit amount can be applied to varying services depending on the plan, but may include care in assisted living facilities, nursing homes or in the home through a home care agency or caretaker. Plans also often include options for respite or hospice care, and may also include coverage for adult day service centers. For those who choose only home coverage, the insurance will most likely cover skilled nursing care as well as caretakers to help with basic daily activities like bathing, eating and dressing. Coverage may also include home services for occupational therapy, physical therapy and speech therapy.
Not everyone qualifies for long-term insurance coverage, and acceptance criteria vary from company to company. In general, companies will not approve a policy if you are currently using a long-term care service or already need long-term care. Certain diseases or conditions may also disqualify you from receiving benefits including metastatic cancers, dementia, AIDS, Alzheimer’s disease, Parkinson’s, multiple sclerosis or if you've had a stroke in the last two years. Different insurance companies have different qualification guidelines, so just because you were rejected by one company, does not mean that you will be rejected by all of them.
How and when you receive benefits depends on two factors called benefit triggers and the elimination period. Benefit triggers are factors that determine your need for care, such as help needed with certain daily care activities or cognitive impairments. Most policies require at least two benefit triggers in order to receive benefits. These triggers are determined by either nursing care staff or a social worker.
The elimination period is the time needed after a benefit trigger develops before you can receive benefits. The member chooses the elimination period time when they buy their policy, and it typically comes in increments of 30, 60 or 90 days. You will be responsible for paying your long-term care costs during this period, but will receive benefits once the elimination period ends. At that time, benefits will cover up to the maximum daily limit until you either no longer require services, or you reach the maximum lifetime benefits limit.
The costs of a long-term policy are determined by the premium amount. Premium amounts vary widely based on the applicant's risk factors. For example, someone who is under the age of 60 is less likely to need long-term care immediately, and will most likely pay a smaller yearly premium than seniors with higher risk factors. Price is also determined by the amount of coverage, as comprehensive coverage that includes both at-home and facility care will cost more than a basic plan that only covers one. The amount of coverage or daily benefit amount will also impact the overall costs. For an individual quote, it's important to ask detailed questions of an insurance agent to make sure a policy has the right balance of cost and coverage for your individual situation.
Investing in long term care insurance provides options for those that cannot afford to pay the full cost of facility or home care services. Policies makes quality care accessible, and can help relieve the burden from families who do not have the ability to take care of their loved ones to the level of care needed or deserved. To see how much long-term coverage would cost for you or a loved one, talk with a quality insurance agent today.