This discussion about long term care insurance is brought to you by Genworth and Brandfluential but all opinions expressed are my own.
My grandmother is 92 years old and a few months ago had to leave home and begin living in a nursing home. It makes me sad to think that she is no longer living independently like she is used to but this was the best choice in terms of her health and well being. She doesn’t care for her current living situation that much. She really hates that the money she worked so hard to earn all her life is now being eaten up by nursing home costs. Nursing homes are extremely expensive and this situation with my grandmother has me wondering whether or not my husband and I should consider buying long term care insurance.
What is Long Term Care Insurance?
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Long term care insurance is a specific type of health insurance designed to cover your expenses if disability, illness, or accident interferes with what they call ‘daily living activities’. My grandmother couldn’t get around well on her own and was confusing her medicines. She ended up in the emergency room twice over a short period of time. Daily living activities include many things like bathing, using the bathroom unassisted, dressing, eating, and walking. Basic activities that I take for granted right now but that one day I may not be able to do for myself. My husband and I are concerned that if one or both of us need long term care, we may not have the money we need to pay for it. And since long term care insurance is cheaper when you are YOUNG, we really need to start investigating this now rather than waiting another 20 years. If you are considering long term care insurance, here are a few things to keep in mind:
1. Buy only what you can afford: Do not try to find a policy that will cover 100% of your long term care needs if you cannot comfortably afford the premiums. If you are spending too much on monthly payments you are more likely to drop the policy completely.
2. Consider inflation: Health care costs rise every year, as do all other life expenses due to inflation. Some long term care insurance programs offer an inflation adjustment so that when you actually need to cash in and use the plan to cover costs it will be enough to pay for your expenses.
3. Understand the elimination period: This is the amount of time you will have to pay out of pocket before your long term care insurance kicks in. The shorter the elimination period, the more expensive your long term care insurance premiums will be.
4. Know what is covered: Make sure your long term care insurance spells out exactly what will be covered. All plans are a little bit different but may cover adult day care, home care services, assisted living facilities, respite care, hospice care, nursing homes, Alzheimer’s facilities, and home modification costs. Sometimes a nursing home is the only way to go for safe elderly care but many buyers of long term care insurance prefer home care.
5. When do you stop making payments? Make sure your long term care insurance includes a waiver of payment during the benefit period. That way, if you end up with no source of income when you need to begin drawing on your benefits, you don’t have to continue making payments.
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There are so many factors involved when considering whether you should buy long term care insurance. But, planning ahead will mean peace of mind for my husband and I when we get older. I like to think that I will live my entire life in my own home with my husband sharing the rocking chair next to me on the porch but I want to be prepared if this isn’t the case! If you are starting to wonder how you will cover your long term care needs when you get older, Genworth Financial has a number of useful resources to walk you through the research process.
Disclaimer: This post has been brought to you by Genworth Financial and Brandfluential but all opinions expressed are my own.
Diane is a professional blogger and nationally certified pharmacy technician at Good Pill Pharmacy. She earned her BS in Microbiology at the University of New Hampshire and has worked in cancer research, academics, and biotechnology. Concern over the growing incidence of human disease and the birth of her children led her to begin living a more natural life. She quickly realized that the information she was learning along the way could be beneficial to many others and started blogging and freelance writing to share this knowledge with others. Learn more about her HERE.
Something to think about. Our system in Canada is a little different, but long term care can be very expensive
It’s definitely not something I like to think about. I really want to stay in my home as long as possible.
This is a very helpful article because it makes us think about taking care of ourselves, forcing us to break through our denial that we are getting older. My folks have some form of this, but I like tot think my son will take care of me forever. But, that would not be fair to him as I get too old and need nurse services. A lot to think about here!
thanks,
Mitch
I worry about my parents because they live so far away. It really is a scary issue to get old and not be able to care for yourself.
This is definitely something very important to consider.
This is definitely something I need to look into further, before I get much older.
It is always good to raise awareness for something that could be needed in the future whether we like to face the fact or not. So thanks for sharing!
Great information presented in an easy to understand way, something not easily done in such a monotonous industry!
The truth is, the majority of people are still in complete denial about their risk of needing long term care. The “Sandwich Generation” is leading the way in buying policies as they watch their aging parents experience the woes of long term care without insurance. As you pointed out, nursing homes (thankfully) aren’t the only option! For every 1 person in a nursing home, there are 4 people receiving in-home services. If that is something you prefer, be sure the policy you choose allows for it.
It is important to work with an independent agent who can help sift through the detailed policy features and find the plan that works best for your specific needs. I like to think I’ll be sitting on my front porch forever, too, but like you said, just in case! 🙂
Best of luck!
Rachel McQuade
LTC Tree
My elderly mom has had LTC insurance with Genworth Life Insurance Company for 12 years. They have increased her premiums twice now. The latest one, this year, was an 18% increase. Keep in mind that LTC insurance companies are just that: insurance companies. They are accustomed to generating a lot of profit and will ensure they continue to receive it, no matter if it’s from older folks on social security.
Also, keep in mind that insurance in general is a gamble, speculation, if you will. The insurance company is basically betting that you will never file a claim. So weigh your options carefully.
Oh, and BTW, be sure to ignore Suzy Orman’s advice when she talks about LTC insurance. I recall several years ago, she was touting that it’s rare for the insurance company to raise their premiums. Might be true (our average is every six years), but when they do, hang on to your wallet.
BTW, this post was sponsored by Genworth? It will be interested to see if this comment actually gets posted.
I appreciate you stopping by and will certainly share your concerns about the rate increases with the sponsor. I work in the healthcare field and yes, all types of insurance are a bit of a gamble. If you don’t ever get sick you may think that you are wasting money but the catastrophic costs associated with hospitalization make insurance a smart choice. While I love to think that my kids will care for me when I get old, that may not be possible and the cost of long term care is rather staggering.