What Is Long Term Care Insurance?

Long Care Disability Insurance is a form of insurance that offers you a daily payout to help cover expenses during a chronic illnesses or disability. The funds are paid to you over a period as agreed in your insurance contract. Long term disability policies may vary with terms, conditions and payouts.

Unfortunately, a majority of United States citizens wrongly assume that Medicare or their company health insurance will cover their long-term care costs.

Employer health coverage, e.g. Blue Cross, will not pay for long-term/ extended healthcare services. If you qualify for Medicare, then Medicare will likely cover a short-term stay in a nursing home. However, extended care in a nursing home care will only be covered by Medicare under extremely narrow and strict conditions.

So, when should you start thinking about purchasing Long Term Disability Insurance?

Financial guru Dave Ramsey recommends you add Long Term Care to your financial plan around the age of sixty.

If you need to add long term insurance to your financial plan, then you should consider the following:

• Options– Long Term Insurance policies vary in payout and flexible of options. You should know what you options you may have in the future. Some long term insurance plans will pay for assisted living, modification of your home or in home nursing.
• Calculate Your Needs– You need to figure how much money you would need to cover daily health costs if you were to become chronically ill or disabled.
• The Waiting Period– Decide what amount of wait period you can afford before the long term care policy is active. Usually, the longer waiting periods will lower your premiums.
• Premium Costs– Does the premium for your long term care healthcare insurance increase each year? Some long term insurance policies may have a step up fee schedule.
• Taxes– Are you going to purchase your policy with personal funds? If you do purchase long-term insurance with personal after-tax dollar money, then your long-term insurance may be tax-free.

You need to understand the terms of your long-term insurance policy. If you do not understand the terms of the insurance policy then ask your insurance agent questions. You should also make sure that your insurance agent has extensive long-term care insurance.

Long term insurance is an insurance that most be adults over sixty years old should purchase. Hopefully, long term insurance is a form of insurance that you will never have to use but Medicare & You, statistics are staggering:

At least 70% of people over 65 will need long-term care services and support at some point in their lives.

Resources:

https://www.medicare.gov/Publications/Search/Results.asp?PubID=10050&Type=PubID
http://www.aarp.org/health/health-insurance/info-06-2012/understanding-long-term-care-insurance.html

http://www.daveramsey.com/blog/long-term-care-why-age-60/