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"If the care needed can be classified as “skilled,” coverage under Medicare, Tricare, and Medicare Supplement will pay only for the first 100 days of nursing home care. If the care is considered custodial or intermediate, the regular health insurance coverage does not pay at all."

Long Term Health Care Insurance: Purchase while you still can

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Only about 8 percent of retired seniors own Long Term Care Insurance. Those who are very wealthy have been told they don’t need it, and those who are very poor will have Medicaid—we hope—to pay that bill in the event of the need for extended or post-hospital care beyond what Medicare will pay for. However, a huge segment of the population stands to lose billions of dollars in remaining retirement assets—not to mention the impact on family—when extended care becomes necessary. People continue to put off the purchase of long term care insurance, however, partly because of misconceptions in its usefulness or practicality and partly because the average person doesn't expect to actually need it.

The fact is, more than half of today’s 65 year olds will at some point need either home care, assisted living care, or nursing home care. If you told a room full of 1000 people that half of them were destined to lose their homes in a fire within the next 20 years, nearly everyone in the room would go home, pull out their home owners’ policies and take a second look at exactly what would be covered. The likelihood of needing Long Term Care Insurance is much greater than the likelihood of fire, but the average middle class retiree—the person who needs it the most—continues to put off the purchase. If you are one of these, the health, finances and emotional well-being of your family along with the security of your own estate are all at risk. 

If you are a middle or upper middle class retiree with property, retirement assets, and a desire for choice and dignity in your senior years, LTCi simply must be a part of your senior planning. In fact, it is so important that more and more accountants, financial planners, CPAs and personal advisors as well as estate attorneys are urging their clients to check out some LTCi policies and find out if they are health qualified to purchase it. Be warned, however. The underwriting is often tougher than even that for life insurance; approximately 35% of those who apply are declined. The longer you wait, they more likely you will be to simply have to put your own funds at risk.

Some people neglect to purchase LTCi simply because they do not understand what it is, or because they mistakenly think Medicare will pay for it. Long Term Care is any level of care—skilled, custodial, or intermediate—that will be required in home, in an assisted living facility or a nursing home for longer than 90 days. It is not hospital insurance, companion service, or housekeeping. It is care provided when you are either functionally incapacitated or when you have lost your cognitive ability to care for yourself (via Alzheimer’s Disease, Parkinson’s or some other mental impairment.). If the care needed can be classified as “skilled,” coverage under Medicare, Tricare, and Medicare Supplement will pay for the first 100 days of nursing home care. Beyond that, Medicare and all other traditional forms of health insurance cease to pay the bill. If the care is considered custodial or intermediate, the regular health insurance coverage does not pay at all.  

When purchasing Long Term Care insurance, it is highly advisable to work with an agent. The benefits of having a real person to represent you are numerous, but in addition to having someone explain the benefits and customize your plan, it is much better to have a real person help you activate the policy in the future if you should need to begin using it. If you are incapacitated, you will be unable to manage 800 numbers to activate your policy, and your family members—who have their own lives and don’t understand exactly what you have—are likely to be frustrated by trying to work with something that you might not have shared with them in the first place. 

Even though you need an agent, you can use our convenient service to locate a company near you that will provide long term service for your long term care needs.

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