Long-term care insurance: Advice for you and my aging parents
When I started working in Home Care over 10 years ago, very few seniors had a long-term care policy that paid for their care. In 2019 over one-third of our clients had their care paid through their long-term care insurance policy.
Many do not pay any out-of-pocket expenses for their caregiver. What a change in the industry and what a great benefit!
Long-term care insurance was created because Medicare and other traditional insurances do not pay for hourly Activities of Daily Living (ADL) support. ADL support includes bathing, dressing, toileting, ambulating, feeding, and cognitive support. This type of hourly support, as well as companionship, cooking, errands etc. are commonly purchased from 4 hours a day through 24 / 7 live-in care with agencies like Seniorcorp.
Long-term care insurance is something purchased well before you have the need and you pay on a yearly basis. Below, I will provide advice for seniors who already have long-term care insurance and for the adult children who may be shopping around for it.
For adult children looking to buy long-term care insurance:
1. Get It Early: It is getting harder and harder to purchase long-term care insurance. The underwriting is difficult and the longer you wait the more expensive it is. Try to buy it while you’re healthy and in your 50’s if possible. If not, do it as soon as possible and make sure you do it prior to any chronic diagnosis.
2. Check Your Assets: There is no defined range to tell you if buying long-term care insurance is right for you. One standard is if you have liquid assets between $250,000 to $3 million you may want to consider buying long-term care insurance. If your assets are under this you will probably have to “spend down” to qualify for Medicaid and if you’re over you can probably consider self-insuring and paying privately.
3. Be Prudent: Don’t feel the need to buy the Cadillac plan. You can consider buying a lifetime policy but it will be much more expensive. Often a 3 to 5-year benefit period is usually enough. Also, if you budget the money wisely it will also last many additional years. Also $150-$250 a day is an appropriate range. Lastly, adding a 30 to 60 day elimination period before your policy kicks in will also save you substantially as well.
For Seniors who already have a policy:
1. Do Not Stop Paying: Often seniors get frustrated paying the bill every year even after they’ve invested so much in the policy. Unless you absolutely have to stop, try to continue paying it. It will more than likely come in very handy. Otherwise you may really regret it when you finally need it.
2. Get an understanding of what your policy covers now, before you open a claim: Find out what your elimination period is, how much benefit you get per day and the process for opening a claim. Doing this upfront may save you months of delays, as well as making the right decisions when care starts, so you are not declined.
3. If you open a claim use just the daily dollars you need: If most people have $200 a day (as an example) as a benefit, often times they spend it completely. However, most policies will allow you to carry dollars over when not used, which can make your policy last years longer by budgeting your care.
4. Don’t delay: If you feel there is a need for care, it is better to do it before there are a lot of caregiver hours needed. Often getting a caregiver in the home earlier and even less frequently, prevents bigger incidents from happening and keeps the hours needed at a much lower level long-term.
At Seniorcorp, we do not sell long-term care insurance but we do perform free home assessments, letting you know what type of home care is available. We even have a program which puts us on hold if the need ever arises. We also do an in-depth review of your policy to help you understand your benefits even if you do not need care in the near future.
We are glad to help you anytime and can be reached at (757) 640-0557.
By Tom Knox