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A Beginner’s Guide to Long-Term Care Insurance

Long-term care is expensive, but with the right planning and insurance, you can protect your financial future.

Did you know that 7 out of 10 people turning 65 today will need long-term care at some point in the remainder of their lifetime? And long-term care isn’t only for the elderly; people with chronic illnesses or who go through a traumatic accident may also require this type of support at any age. 

As you can probably imagine, long-term care is incredibly expensive, depending on the level of care and the length of time. The median cost for a home health aid in the U.S. is around $4,500 a month, and a stay in a private room at a skilled nursing facility costs more than $8,8000 a month.

Even with health insurance, you will likely end up paying large amounts out of pocket. For example, Medicare only covers up to 100 days of skilled care after a hospital stay. 

Fortunately, there’s another option that can give you peace of mind and help make sure you receive the best care possible at a cost you can afford: Long-term care insurance. If you’re looking for help choosing a policy or are just interested in learning more about the concept, keep reading for an overview of everything you need to know. 

How Much Does Long-Term Care Insurance Cost?

Long-term care insurance is often expensive, but it’s much more affordable than paying for long-term-care out of pocket.

Keep in mind that your premium costs are partly determined by your age when you apply for insurance, so enrolling when you’re younger is more cost effective. Many people wait too long to apply for long-term-care insurance and end up paying much higher premiums as a result.

Just like any other insurance plan, the cost of a long-term care policy will depend on the amount of coverage you receive, as determined by your inflation rider and your elimination period.

What Does Long-Term Care Insurance Cover?

When you hear the phrase “long-term care,” your first thought may be of visiting an older relative at a skilled nursing facility. But long-term care encompasses much more than just skilled nursing. 

In fact, there are three main levels of long-term care that are covered by most long-term care insurance plans.

1. Skilled Care

Skilled care is the highest level of long-term care, for people who require full-time supervision by a medical professional. This may include physical therapy, wound care, intravenous injections, catheter care, and more. 

Because it involves around-the-clock supervision, either in a skilled nursing facility or at the patient’s home, this is also the most expensive form of long-term-care.

2. Intermediate Care

Intermediate care may involve many of the same procedures as skilled care, but it’s reserved for individuals who don’t need full-time supervision. While still expensive, it is not as costly as full-time skilled care.

3. Custodial Care

For many people, long-term care is not medical care, but rather assistance with basic tasks, or custodial care.

Custodial care may involve assistance completing personal tasks, called Activities of Daily Living. These tasks may include bathing, dressing, using the toilet, getting in and out of bed, incontinence care, and feeding.

Additionally, some people require assistance with everyday tasks, called Instrumental Activities of Daily Living. These could include housework, grocery shopping, laundry, taking medication, pet care, meal preparation and clean up, and using the telephone. 

Custodial care will vary in cost depending on the amount of time a caregiver is spending with the patient. It is typically not covered by Medicare, which is why long-term care insurance is so important. 

How Do I Choose the Right Long-Term Care Insurance Plan?
When looking for a long-term care insurance plan, it’s important to consider the amount you’re willing and able to pay in premiums, but also the amount of coverage you require. We recommend choosing a plan with an inflation rider, which requires you to pay a small amount annually (often around 5%) in exchange for increased benefits to counteract inflation. You should also pay close attention to the elimination period outlined in any policy you’re considering. Most long-term care insurance plans require you to pay out of pocket for a set number of days at the beginning of your care. This can range from 20-100 days, and a shorter elimination period will mean higher premiums. If you have Medicare, make sure that the 100 days of care covered by your health insurance can count toward the elimination period.

Don’t Wait to Get Insured

It may seem unnecessary if you’re young and healthy, but a long-term care insurance policy can play a vital role in protecting you and your family’s financial future. If you’re interested in learning more about how long-term care insurance can fit into your insurance portfolio, we would be happy to help you navigate that process. Contact us today  to schedule a consultation!

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Meet Shawn Goheen, the heart and soul behind Goheen Insurance. Since the early ’90s, Shawn has been more than just a financial advisor; he has been a trusted confidant to high-net-worth individuals. His journey has led him to build strong connections with over 15 specialty lenders and insurance carriers, and relationships with 20+ banks, giving him a rare edge in navigating the often-complex financial world with ease and transparency.