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Long Term Care Insurance Guide

Long Care Term Insurance is designed to help pay for the care that people may need as they get older, especially after retirement.  Many disability policies now have the feature that after a certain age, the disability benefit can be converted to a long term care benefit, determined by the policy.

The cost of long term care, or needing to live in a long term care home, can be very high and put a strain on, or wipe out one’s retirement savings.  Long term care policies generally pays when one cannot do one or more of the activities of daily living which can include:

  • Dressing
  • Feeding
  • Bathing
  • Walking
  • Getting in and out of bed/chair
  • Toileting

Age isn’t always the factor in determining who does and does not need long-term care. 40 percent of all people aged 18 to 64 need some type of assistance. That’s more than a quarter of people needing this kind of help who are not 65 or older.

Long term Care insurance can pay for one or both of the following situations

  1. You are in a long term care facility
  2. You are at home but receiving some form of assistance or nursing care.

Home care will pay (up to the maximum benefit of the policy) for a live-in caregiver or visiting caregiver, therapist, private duty nurse, companion, housekeeper, etc.  Facility care will pay for the facility, again up to the maximum benefit of your policy.

Long-Term Care Insurance: Think of it as “Retirement Savings Insurance”

Most people don’t like the idea of leaving the burden of financial care to their children or other family members.  Without this kind of insurance, a person’s savings, as well as their family members, can quickly disappear. Look at long-term care insurance to accomplish two things:

  1. To preserve the inheritance you want to leave behind for your family
  2. Protect your income and retirement savings from being exhausted.

How Insurance Companies Determine the Rates You Will Pay

There are several factors that determine how much you’ll pay for long-term care insurance which include:

  • Your age
  • The daily or monthly benefit
  • The elimination period
  • The length of time to pay
  • Inflation protection
  • Your Health rating (sub-standard, standard or preferred)

The majority of insurance companies provide multi-life and couples discounts on individual plans.

Long term care insurance is usually purchased by people aged 45 and over as they start to see the impact that long term care has had on other family members, and the impact in may have on their own retirement.  The sooner it is purchased, the cheaper it will be.  Some insurance carriers have left the long term care insurance market as they consider the possible future payouts to be too great.  So this is a valuable type of insurance to get before it may be too expensive, or too late.

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