If you become incapacitated through illness or disability and need round-the-clock-care, will you be able to afford it?
This is the question that many seniors have asked themselves while carrying out long-term life planning, but the answer is not often simple. It’s almost never too early to begin looking at your options for long-term care. Though you may have many financial safeguards in place for your retirement years, a major medical event that causes you to need ongoing care can rapidly drain all of your savings. Long-term care insurance provides an extra layer of coverage for this possibility.
Long-term care is not usually medical care. It really refers to all of the services a person would need in addition to their medical care. According to the National Association of Insurance Commissioners (NAIC), long-term care includes:
As you might imagine, becoming fully dependent on others for your daily care can be quite expensive. Review your existing insurance coverage - both primary and supplemental policies - to see what would be covered in the event you need constant care. If it doesn’t seem to be comprehensive enough, you may want to consider adding a long-term care policy.
While the needs for long-term care insurance are growing, the number of providers is shrinking This means that obtaining a policy for your own care may take some research and work. There are various reasons that long-term care insurance policies are harder to come by, but it mostly boils down to not being a very profitable product when sold at premium rates people are willing to pay. The NAIC has challenged a task force to look for solutions to improve long-term care insurance availability. In the meantime, it is important to find a policy that works for you.
Medicaid will cover long-term care services for very low income individuals. Since Medicaid costs are shared by the federal and state governments, this coverage will vary from state to state. Medicare covers the actual medical costs associated with the health problems that necessitate long-term care, but it does not usually cover most of the care services mentioned above.
Many individuals are finding long-term care insurance options through their whole life or annuity life insurance products. AARP endorses long-term care insurance through New York Life. Military veterans are eligible for coverage through the VA. If you have another group membership association, look into their resources to find out if they offer or endorse a provider.
To start researching long-term care insurance providers, reach out to your health insurance agent, life or home insurance agent, financial advisor, or estate planning attorney for recommendations. These professionals may have a policy that is right for you, or could point you in the right direction. They will also appreciate the opportunity to review all of your current financial plans to ensure that no matter what policy you obtain, you will use your resources most effectively as you age.
While you are looking into policies, make sure to have conversations with your loved ones about how you want to be cared for if long-term care is needed. This is a good time to update your will, power of attorney, living will, and advance health care directives. The best way to ensure that you will be cared for in alignment with your wishes is to make everything clear while you are in good health.