Preparing For The Future

You just turned 70, but you feel like you’re 50. In fact, you just went in for your annual physical and received a clean bill of health.
Your neighbor, on the other hand, isn’t so lucky. She just suffered her third heart attack and has to move to a nursing home because she can no longer take care of herself. You can’t imagine having to leave your home, and hope you never have to. Recent studies, however, show that 40 percent of Americans over the age of 65 will need nursing home care at some point in their lives. The longer you live, the more likely you are to require care in a nursing home, and your stay won’t be cheap. The average nursing home charges approximately $45,000 a year per resident, and in some areas, the cost is even higher. Regular medical insurance does not cover nursing home care, and Medicare provides only 20 days of
full coverage and 80 days of partial coverage. Home care is an alternative option, but again, the cost is high. Bringing in a home health aide just three times a week can cost up to $1,000 per
month and additional care, like physical therapy, increases the cost.
The cost of long-term care can be astronomical, but there is something you can do to ease the financial burden. Many insurers now offer long-term care insurance (LTCI) for individuals between
the ages of 40 and 84 who might need long-term care in the future. If you have assets over $75,000 and you can afford the monthly premiums without radically changing your lifestyle, you may want
to consider purchasing an LTCI policy. In exchange for your premiums, LTCI contributes a daily amount toward your
long-term care needs. The type of care covered and the setting in which that care can be provided, however, varies from policy to policy. Most long-term care policies cover skilled, intermediate and custodial care. Skilled care is usually ordered by a physician
for the treatment of a specific medical condition and is provided 24 hours a day by trained medical professionals. Intermediate care is supervised by a physician and provided as needed by
medical professionals. Custodial care helps patients with everyday activities, such as bathing and dressing, and is typically provided by people without medical training. As long as the nursing home is
licensed, most LTCI policies cover all skilled, intermediate and custodial care provided there. Some, however, extend coverage to care provided in a setting outside of a licensed nursing home,
such as the home, adult day care center or hospice or respite facilities. Because the settings in which such care can be provided varies from policy to policy, it is best to shop around for a policy that suits your needs. For example, if you only need custodial care, and you can get that at home, then you should purchase a policy that will provide that type of coverage. If you’re healthy and do not need any care, you may want to find a policy that will cover care in a variety of settings. Most policies do not cover care outside of the United States or for certain conditions, such as alcoholism and drug abuse. Some also have restrictions on pre-existing conditions. Check with
your insurer to see what your policy does and does not cover. To receive the benefits of a long-term care insurance policy, you must demonstrate a need for it. Typically there are three ways in which this can occur: You can no longer do a number of daily living activities, such as bathing, dressing, preparing meals, etc. You are suffering from Alzheimer’s disease or some other cognitive mental
impairment. Your doctor has ordered long-term care medically necessary Once you demonstrate a need for long term care, your insurer will start helping with the costs, easing your financial
burden. With the costs of medical care rising each year, there is no time better than the present to start preparing for long term care. Although your health may be fine now, that may not be the case later. The longer you wait to purchase an LCTI policy, the higher premiums you’ll pay. Once you purchase a policy, however, your rates will never increase unless your insurer raises the premiums for an entire class of policyholders. For example, if you purchased the policy when you were 65, you’ll pay the same rate as a 65-year-old purchasing a new policy. So start looking now and purchase a policy that will provide the type of coverage you’re looking for.

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