What is Long Term Care Insurance?

In exchange for periodic premium payments you make to the insurance company, the company promises to pay you a daily benefit to cover the cost of long term care. Long term care is ongoing care for people with chronic disabilities. It includes custodial care – assistance with activities of daily life like eating, bathing and getting dressed – in a nursing home or in the patient’s own home.

Government studies indicate that 40% of Americans over age 65 will eventually need some type of long term care. With more Americans living longer, this need is likely to increase. Today, a year in a nursing home on average costs $40,000. In some parts of the country, it can range up to $80,000 and more. Contrary to common belief, Medicare, Health Insurance & HMOs don’t cover long term “custodial” care at all. Only “skilled” care is covered for very limited periods of time.

Do You Need It?

Long term care insurance makes sense for you if you are concerned about protecting your assets and maintaining your financial independence throughout your life. As you or other members of your family enter your 50’s, 60’s, 70’s and beyond, part of retirement planning should include long term care.

Consider the Following…

Over 50% of all people over 65 need “custodial” care at home, in an adult day care center, in a residential facility or nursing home.

For every 1000 people…

• 5 will have a House Fire (the average loss is $3,428)
• 70 will have an Auto Accident (the average loss is $3,000)
• 600 will need Long Term Care (the average cost is $40,000 to $80,000 per year)

(Source: Society of American Actuaries & HIAA)