how long term care insurance works

What exactly is Long Term Care Insurance, and did I hear Susie Orman recommend it for the baby boomer generation in an older podcast? I had to go down this rabbit hole, and boy, am I glad I did! This is something I never would of considered but makes a ton of sense.

In your early twenties or thirties, you are healthy and fit, living every day with a boost of energy, fully independent, and free to move. But remember, it doesn’t always stay that way. There are slight chances that you might need someone to take care of you in your late 80s or 90s or even before that. There is no age set for a medical illness that requires you to have a personal caretaker 24/7. Sounds scary, right? But the scariest part is, what if you can’t afford to pay for it? What do you do then? Well, you never know how your finances might end up in the future, which is why it is best to start preparing for them right away. Wondering how? The best approach is to invest in long-term care insurance. Before you even go there, no, your traditional health insurance doesn’t pay for it. So, if you know someone who is sick, or you wish to get it for yourself, then you have landed in the right spot. In this guide, we are going to discuss long-term care insurance in detail.

What Is long term Care Insurance?

For starters, long-term care insurance is a type of medical insurance that helps pay for assistance bills in case of serious injuries, disabilities, or medical needs. With its help,  you can opt for a personal assistant who helps you carry out your day-to-day tasks such as eating, bathing, dressing, and moving around. The good thing is that age is not a factor, which means that you can opt for it any time during your lifetime. But we suggest that you start investing in it right away because you might never know when a disability hit. Plus, you won’t qualify for the insurance if you already have a disability or a chronic illness.

Why buy long-term care insurance?

According to the statistics, around 50% of individuals above the age of 65 end up developing a disability, and the same is the case with chronic illnesses. Another study shows that most of them will only need special assistance for two years, whereas 14% might need it for more than five years. If you add up the monthly cost, it can be huge! With no income source at that age, it might be hard for you or your family to cover the cost. Therefore, investing in long-term care insurance might be the best option for you. In case you don’t have the insurance, you can opt for federal and state health insurance programs, but they will end up draining your savings within a year.

So, the best approach is to get long-term care insurance from the start. You might need it, or you might not. But it is better to invest in it to protect yourself from hefty medical bills at a later age. Here are the two major reasons why individuals invest in long-term care insurance.

1-   To protect savings

As mentioned earlier, personal care can cost a lot whether you are getting home health aides, adult day care, or nursing home care. Within a year, it will drain all your savings, leaving you with nothing but an empty bank account. According to a survey, the cost can range between $50,000 and $100,000 annually. 

2-   Get More Choices For Care

Having more money means having more choices. Depending on your medical condition, you can opt for the best care choice for your needs. If you don’t have insurance or money, you can qualify for Medicaid and government programs, but neither pay for assisted living in multiple states.

How long-term care insurance works?

Now that you know what it means and why you need it, you most probably want to get it. So, the question is, how does it work? Well, the procedure is simple and straightforward. The only thing that you might need is your detailed health care records.  The very first thing that you need to do is look for an insurance provider. Ask your relatives, neighbors, or your health care provider. They will definitely recommend a suitable insurance provider who is reliable and trustworthy. Next, you need to visit the insurance provider. You may need to call beforehand to set a time and date for the meeting. Once done, gather all your documents and prepare for the meeting. The provider will present several coverage plans that you can opt for, so choose what best suits your needs.  Once your policy is approved and issued, you begin to pay a premium. Depending on your policy, you can claim if, due to some disability or chronic illness, you fail to carry out at least two to six of your daily activities.

The most common daily living activities are;

  1. Bathing.
  2. Caring for incontinence.
  3. Dressing.
  4. Eating.
  5. Toileting (getting on or off the toilet).
  6. Transferring (getting in or out of a bed or a chair)

Also, when opting for a claim, the insurance company will require supporting medical documentation from your health care provider and may end up sending their own doctor or nurse for analyzing and evaluating your condition as well. Once satisfied, the insurer will approve your care plan and provide the required funding as per your policy.

How much does long-term care insurance costs and pays?

The cost and the payout of the long-term care insurance depend on your insurance policy. But on average, for a 60-year-old couple, the monthly cost falls between $200 and $300. In contrast, the insurance company pays around $150 per day for nursing home care for a specific number of years. Remember, the higher amount you pay, the more benefit you will get at the end. So depending on your financial position, opt for the best insurance care plan for your future.

Will this be something I consider- Hell Yes!

This is something I do plan on working into my budget over the next few years; it’s a no-brainer for my circumstances; with one child and not much family, I have pondered this very topic of who will take care of me; when am I older? Hoping my son will; however, you never know what life will through your way, so absolutely, I will invest in long-term care insurance and feel a little more secure when I enter those golden years.

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Felicity Nicole
Felicity Nicole
Owner , She Is You
I’m Felicity Nicole, and I was born and raised in the Chicagoland area. A tomboy at heart, I can be found hair up, favorite sweatshirt on, cooking up something yummy for my family. I am remarried to a wonderful man who totally gets me (woohoo!)., It turns out God does give us second chances! I am now a stepmom to two adult children who are super beautiful and a nonstop blessing in my life. Watching my son play baseball is by far my greatest joy. I am a transformational coach and Reiki Practitioner on a mission to help women redesign their lives. This mission comes directly from my own personal experience with self-discovery. From an abusive marriage to a healthy, fulfilling relationship, through multiple careers and a lifetime of coaching the women in my own life, what I realized is that I have always had power and tenacity deep within me…I just needed to let it thrive again. My courage and determination to walk away into the unknown and redesign my own story is a shining example that where there’s a will there’s a way. On the lighter side, I like my pizza thick and layered in meat and cheese (remember, I’m from Chicago). I spent 22 years in the veterinary field, where I brought home WAY too many fur babies. And if I had one thing to bring with me to a desert island, it would be coffee.
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