Long Term Care Insurance, part 3
Long Term Health Care (LTC) Insurance is a life-planning strategy to insure coverage for the unexpected. Many savvy (and financially able) people initiate policy coverage in mid-life. This benefit enables them to gain insurance coverage while healthy, and insure the benefits needed when they are elderly or infirm. It can be a “safety net” purchase. For aging seniors, it may guarantee a minimal standard of living and treatment for those who may fall sick.
Life insurance, including long term are insurance, now comes in many sizes and shapes. Read the fine print, or consult with an insurance agent, to confirm elder coverage benefits. Here’s a quick overview of some options:
— Hybrid life insurance: has long-term care benefits packaged into the premium. Along with the life insurance death benefit, hybrid policies can also include long-term care coverage for illnesses not covered by long-term care insurance.
— Term life insurance: policy benefit accumulates no cash value. Usually an annual policy term (1 year). The policyholder has a choice to renew or end coverage when the term expires.
— Whole life insurance: provides a death benefit, but also contains a savings component. Part of the premiums go toward savings, so you can accumulate some cash value over time.
— Universal life insurance: also builds cash value but offers a more flexible way to build savings. Premiums fluctuate depending on your needs.
Compare and contrast benefits. For example, Home Care Partners has worked with clients carrying widely divergent coverage benefits. In one case, our client had 24/seven coverage every day. All homecare expenses were paid or re-imbursed. In another case, our elderly client took advantage of a daily per diem fee which covered Home Care Partners hourly services. More specifically, her policy covered up to $150.00 per day of homecare services. So our client could choose to have homecare staff daily, or on selected days. And she was covered for approximately six hours of care service through her long term care insurance. Not a dime came out of her pocket. Home Care Partners directly invoiced and was paid by the insurance carrier.
Clearly, this is a “life-planning” function which will require much greater personal ownership and awareness as our population ages. This will require a complete “mind-shift” for many seniors, who: 1) never realistically expected to live this long, and 2) somehow expected and assumed that services such as Medicare would “take care of me” as needed.
There are no real comprehensive and all-inclusive services available to the general population. For example, Medicare does not cover funding for assisted living facilities. These very hefty monthly expenses require seniors to pay privately, out-of-pocket. And, Medicaid will only provide nursing home coverage for those seniors with very little (less than $2000.) in financial assets.
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John D. Miller is the founder/owner of Home Care Partners, LLC, a Massachusetts business providing private duty, personalized in-home assistance and companion care services to those needing help in daily activities and household functions.
Phone: (781) 378-2164