Protection for Long-Term Care is More Attainable than You Think
The chances of a senior needing long-term care increase at age 65. Long-term care insurance covers numerous costs of aging in place services, nursing homes, or assisted living facilities. Many of these expenses that are covered with long-term care insurance are not covered by Medicare. Director of Personal Finance at Morningstar Christine Benz says, “Long-term care is the unsolved problem for so many people.”
You might be asking: Can’t seniors pay out of pocket for the services they need?
It depends on the care the elder needs and it also depends on the elder’s financial situation. On average, the costs of paying for long-term care amount to $140,000. Additionally, this cost could only cover some of the expenses (and not all of them), so it may even be a larger amount. Most often, people find that insurance coverage is a much more affordable way to go that delivers much-needed peace of mind. In addition, most people do not want the burden of that cost to fall to their children or other loved ones.
Planning Is Key
Premium prices for long-term care policies average $2,700 a year. Many seniors might not be able to get the coverage they need with that cost for premium policies. With Medicaid, seniors can cover long-term care costs, but sometimes only if the elder is impoverished. If a senior has funds saved up, they may be able to pay for costs out of pocket. Figuring out what is needed and how much money you have to give towards your insurance are the first steps in finding affordable long-term care coverage.
Traditional Policies Are Cheaper than Hybrid Policies
If a senior is looking for the most cost-effective form of long-term care insurance, traditional policies have that advantage. Insurance agent Scott Olson says, “Hybrid policies are usually two to three times more expensive than traditional insurance for the same long-term care benefits.”
Hybrid Insurance Policies
If you don’t end up needing long-term care, hybrid policies will return the money to your heir(s). With hybrid policies, you lock your premium upfront, so you don’t have to worry about your rates going up all of a sudden, like you would with traditional policies.
It is preferred to start looking for long-term care insurance in your 50s or 60s. Even if at that moment the senior doesn’t need expenses for, say, aging in place services in their 60s, they may want an insurance plan that covers it down the road. The price for premium insurance policies become more expensive every year a senior waits to enroll. Elders who are 65 have 8 to 10 percent higher premiums than a senior who is 64.
There are many things to consider when it comes to long-term care insurance. Many elders don’t expect they will need it “down the road” because, at the present time, they are still very healthy and may not need things like aging in place services. That is why it is always a good idea to have a plan. Go over finances, look at what type of policy is the best fitting for the aging senior, and most importantly, do not wait. Planning ahead can save an elder from stress and save them money.
To learn more about various services that can help you or a loved one stay at home and still receive services for the elderly, contact us at Stay Smart Care today.