Long Term Care Insurance

A recent study predicted that within the next few years, elder care will become more of an issue for the United States than child care.  By 2005, it is estimated that 1 out of 3 workers will have to care for an aging or ill family member.  Check out these additional facts:

• Every 53 seconds someone in the U.S. has a stroke

• Someone dies from a stroke every 3.3 minutes

• Strokes afflict one-half million Americans every year, killing one-third and disabling another 200,000 individuals

• Currently there are over 3 million survivors of strokes, most living with life-altering consequences of a stroke

• The average length of stay in a nursing home for a recovering stroke patient is 868 days (more than 2 years)

Many people believe that Medicare covers long-term care expenses.  This is only partially correct.  Medicare only covers short term recovery benefits for "skilled" care in a nursing home following a hospitalization.  Medicaid does cover non-skilled custodial type care, however, in order to qualify for Medicaid you must spend most of your assets first.  

Long Term Care (LTC) Insurance provides for handling the financial burden of either nursing home care or at-home care.  Policies typically pay a fixed daily benefit which is chosen at the time of inception of the policy.  LTC coverage is important if your wish to preserve your estate or if you do not wish to burden your family with the care or expense of nursing care.

Several recent studies have shown that at least 40% of Americans over the age of 65 will eventually need some type of long term care.  Depending on where you live the average cost per year of a nursing home stay can raged from $40,000 to over $75,000 per year.

If you have assets greater than $50,000 in value you should be considering long term care insurance.  If you consider that the average cost for a year of nursing home care is $50,000 nationally, the need for asset protection is great.  Further, to show support to the need for long term care insurance the federal government passed legislation in 1997 that provides tax incentives to individuals and corporations who purchase long term care coverage.  What does this mean?  It means that the federal government is telling us loud and clear to take care of our own long term care needs with private insurance.  With the debate ongoing over the long term viability of the federal entitlement programs we should heed this warning.

Key Benefits

• LTC Insurance can be used for at-home care as well as institutional care.
• LTC Insurance typically pays a fixed daily benefit, as long as you need assistance with at least three or more daily living activities or if you suffer from a cognitive impairment or disorder.
• As with other types of insurance, LTC Insurance policies can include riders such as guaranteed renewable, and yearly benefit increases.