Long term insurance coverage is a special type of insurance policy that provides coverage for other services not covered by other health insurance policies. Ideal for people above 65 years, the insurance coverage offers nursing home care as well as personal and adult daycare.
A long-term care insurance policy goes a long way in providing coverage for people who are struggling with chronic medical conditions that make it difficult for them to perform normal duties. Some of the added services included in such policies include bathing, dressing as well as getting in and out of bed.
Insurance companies determine premiums for long-term life insurance coverage based on age, health, as well as the type of policy one wants. For that matter, the longer you wait to take the policy, the more expensive it is likely to be. Buying the policy between the age of 52 and 64 can allow one to get a good deal, given the reduced risk as perceived by insurance companies.
The premiums payable also tend to vary by gender. For single men, annual premiums may rise to highs of $2,050 while that of women may clock highs of $2,700. For people above the age of 55, the average annual premium is about $3,050.
How Long Term Care Insurance Works
Just like any other insurance policy, to enjoy the benefits of LTC policy, one needs to buy the policy and begin paying monthly premiums. While such health insurance policies can be expensive, they provide the much-needed financial benefit when one is incapacitated and cannot work.
Coverage of LTC policies kicks in whenever a policyholder needs help with at least two of the six activities needed for daily living. If one is not able to eat, bathe, dress, move, or even use the toilet, an insurance company is obligated to come in and provide coverage. Similarly, a severe cognitive impairment that may exacerbate policyholders’ health and safety risk also qualifies for coverage.
However, LTC policies come with an elimination period that outlines the number of days that a policyholder must wait to receive benefits. In most cases, the elimination period is usually 30 to 60 or 90 days.
The amount of money reimbursed upon the expiry of the elimination period is known as the daily limit. The amount is outlined in the policy, and an insurance company is obliged to pay the daily limit for an agreed period. In most policies, the payment period can be between two and ten years.
Who Needs Long Term Insurance Care?
Long term insurance care is for people concerned about the costs of eldercare. By paying premiums well in advance, one can avoid the risk of having to pay out of pocket for eldercare. Women tend to be the biggest beneficiaries of LTC policies, as they tend to outlive men most of the time.
People with chronic illnesses or those at a greater risk of contracting such illnesses can also protect their wellbeing at old age by taking long-term life insurance coverage. Such illnesses are known to lead to disabilities that can make it difficult for people to take care of themselves.
Benefits of Long term insurance Coverage
Long term insurance care comes in handy for people who are not able to rely on their children or family members for support. Such policies help cover out-of-pocket expenses while in elder care, consequently averting the risk of having to use savings.
Similarly, long term insurance care coverage allows the insured to maintain a certain level of independence, given their ability to afford quality care upon incapacitation. In addition, the policy reduces the financial and psychological stress that long-term care may pose to a family.
Long-term life insurance coverage also stands out on the fact that it allows the pooling of costs and the spreading of risks. The policy can be a lifesaver given that elder care homes charge as much as $250 a day. Therefore, LTC tends to be cheaper and adequate as opposed to paying for long-term care out of pocket.
Long-term life insurance coverage is also guaranteed renewable, which means an insurance company cannot cancel a policy because of age, physical condition, or mental health of the insured.
Premiums paid on such insurance policy are also tax-deductible with the deduction depending on the age of the insured.
One of the biggest downsides of long-term life insurance coverage is that it can be expensive. Costs of as much as $2,170 a year can be expensive beyond the reach of most people. For that reason, such policies do not compare favorably with other insurance policies.
Long-term life insurance policies also come with restrictions on who can qualify for coverage. For instance, people must buy policies while young and healthy. Older people with pre-existing conditions may struggle to obtain coverage.
Protect Against What Could Be
While most people don’t want to think about the worst-case scenarios, it’s definitely something you should consider down the line. Better to be protected than to pay the price later.
ABOUT MACK DUDAYEV
Mack is the owner and life insurance expert at InsureChance. On a mission to create a way everyone can understand, afford and attain the right life insurance coverage to protect their financial responsibilities.