With nearly 15 percent of the United States population already over the age of 65, few American families are exempt from concerns—now or in the future—about how to care for aging family members. For many, the ability to care for a family member in their own home is not an option, thus necessitating reliance on care from an assisted living facility or nursing home. Reliance on this type of care can prove costly, so it is important that families consider investing in long-term care insurance to help prepare for this eventual need.
What is long-term care insurance?
Long-term care insurance is designed to help cover the cost of ongoing personal care at home, in an assisted living facility or in a nursing home. Under most policies, a specific amount is provided to assist the policy holder in paying for assistance with activities of daily living such as bathing, dressing and eating.
How much does it cost?
The cost of long-term care insurance depends on the amount of coverage and how old you are when it is purchased. When making a decision about how much coverage to purchase, it’s important to understand the current rates charged by both care facilities and home health caregivers. However, be aware that buying coverage to prepare for today’s rates might leave you without adequate coverage in the future. Ask your insurance agent for help planning for future increases in the cost of coverage.
Have an honest discussion with family.
When making plans for the future, have an open discussion with your family. You might not want to impose on your adult children by moving into their home or relying on their assistance. It is also possible that their family or housing situation might make it impossible for them to provide care for you in their home. Having an up-front discussion about these expectations will help determine how much coverage to plan for in the future. This can greatly affect the total premium you invest in your policy.
How to buy long-term care insurance safely.
States are responsible for regulating the companies that sell long-term care insurance. If you receive a solicitation from a company offering you this product, check with your state insurance authority before responding to ensure that the company is authorized in your state. As long-term care insurance is a product you buy well before it is needed, you should do the extra work on the front end to verify that you’re buying from a reputable source. Otherwise, you might find out too late that you’ve been cheated. A list of companies authorized to sell long-term care insurance in your state can also be requested from your state insurance authority.
While we can’t prepare for every scenario life may throw at us, we can prepare for the realities associated with getting older. With a little preparation and understanding of the options available, we can avoid being hit with large, unexpected expenses that would disrupt our golden years. For more information on long-term care insurance and the considerations you should take before purchasing, visit www.longtermcare.gov.
This information is provided with the understanding that the association is not engaged in rendering specific legal, accounting, or other professional services. If specific expert assistance is required, the services of a competent, professional person should be sought.
Provided as a public service by the Pennsylvania Association of Community Bankers.
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