subject: Long Term Care Insurance For The Future [print this page] The popularity of Long Term Care insurance is increasing. The coverage provides care for individuals over an extended period. Two main types of policies are generally offered. A variety of services are provided with coverage. If purchased at the right age, there are numerous benefits to having this type of policy.
This insurance helps cover the expense of caring for a person for a lengthy span of time, usually more than ninety days. The beneficiary does not have to be old, but simply is not able to do more than one simple action of daily living, like bathing, walking, toileting, dressing, and eating. The individual is not "sick" in the classic sense, but cannot independently do these basic activities. This insurance provides care that Medicaid, Medicare or regular health insurance does not.
Two types of insurance exist. One is "non tax-qualified", and does not allow the insured to deduct premiums from taxes. However, this type only requires the insured to be incapable of doing only one basic daily activity. The second is "tax-qualified". This is more popular as its premiums are tax-deductible. This type of policy is available to a person who is unable to perform more than one basic daily function. Tax rules can be confusing. Individuals should seek professional tax advice before choosing a policy, since non tax-qualified plans afford improved benefits. Group employer policies are available, but may not be tax-qualified.
Services included in this coverage are home care, adult day care, hospice, Alzheimer's facilities, and assisted living. These plans also pay the expense of a live-in nurse or companion. Most expenses are reimbursed to the insured. Rates are generally determined by age and health status of the beneficiary at the time the insurance is purchased, the length of the waiting period before plan benefits begin, and any protection against future inflation.
This coverage is effective because it pays for services that are not provided by Medicare and Medicaid. These government benefits either give only short term and partial home and nursing facility care, or the beneficiary's assets must be used up before benefits kick in. Private coverage for extended care pays for home health care, which averages almost $30 per hour, and assisted living facility residence which costs approximately $3000 per month.
Many financial planners advise that the best time to purchase this insurance is when individuals are in their mid to late fifties. Premiums are cheaper if purchased at a younger age, however premiums are paid for a far longer period of time before the insurance is needed. If one waits until he or she is older, then premiums are extremely expensive. People can self-insure if their net worth is over $2 million, excluding the cost of their home. If net worth is below $200,000, then a policy is probably not affordable. If net worth is between these two numbers, then Long Term Care insurance is recommended.
As the population lives longer, more people end up with disabilities, and in need of assisted care later in life. As people plan for retirement, long term care insurance should be addressed. While paying for this type of insurance can be costly, it can be far less than directly paying for health care and long term care. Long term care beneficiaries feel confident that they will be cared for, and that their assets will be secure for their heirs.
by: Allen Brown.
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