Long Term Care Insurance

What is Long Term Care?

Also called custodial care. Assistance, expected to be provided over a long period of time, to people with chronic health conditions and/or physical disabilities who are unable to care for themselves without the help of another person. This can be provided in the home, an asisted living facility or a nursing home.

What are the qualifying ADL’s or Activities of Daily Living that trigger the need for LTC? Activities that people do independently everyday - eating, bathing, dressing, transferring (for instance, from a bed to a chair), using the toilet, and maintaining bladder and bowel continence - used to measure the ability to function.

Some questions to think about…..

1. Do you know anyone, or anyone with loved ones that needed long term care?

2. How did they pay for it?

3. How would you pay for it?

4. Are you familiar with the cost of care in your area?*

5. Wouldn’t you prefer to be cared for at home for as long as possible?

According to government publications, NAIC and other data;

• 25% of American families provide care to elderly relatives.
• 43% of the population currently age 65 can expect to spend some time in a nursing home.
• 25% can expect to spend >1 year in a nursing home.
• 9% can expect to spend >5 years in a nursing home.

The average is between 2-3 years.

What exactly are the costs?

The average daily rate for a private room in a nursing home is $169 or $61,685 annually. In Massachusetts, a semi-private room in a quality nursing home costs an average of $260/day ($94900/yr). Although home care is often less at first, 24 hour home care can actually be much higher. Average rates are $22/hour. And these rates are expected to double every decade!

Traditional health insurance and Medicare provide little or no coverage. While Medicaid (“MassHealth” in Massachusetts) can pay for care, you must spend down most of your assets before becoming eligible. This care must be in a nursing home only. The laws regarding gifts of assets out of estates are changing, too, currently at 3 years prior to admittance potentially going to 5 with legislature pending. If you maintain certain coverage requirements with a Long Term Care policy, you may be exempt from some MassHealth eligibility and recovery rules.

If you haven't thought about including Long Term Care in your financial services portfolio, now is the best time to start! It is in your best interest to include long-term care insurance as an integral part of a well-rounded financial plan. It may help protect your hard-earned assets, and provide more control over how and where you receive care should you need it. Long Term Care insurance may possibly be combined with life insurance as an option as well.