Access to affordable and high-quality healthcare is a priority for many people, especially as we age. While we do have access to testing and tracing family health history, knowing exactly how you will age is a bit of a mystery. That’s where long-term care insurance comes into the picture. Long-term care insurance helps older adults pay for healthcare options such as assisted living, skilled nursing, and specialized care and caregivers. According to the U.S. Department of Health and Human Services, nearly 70% of people age 65 and older will require long-term care at some point in their retirement, and more than 40% will require skilled nursing care.
Long-term care insurance allows older adults access the care they need without depleting their savings account in order to pay for it. However, just like automobile insurance, long-term care insurance policies don’t reimburse you if you don’t use your coverage. Long-term care insurance helps protect your assets and can give you great coverage if you need it. However, it’s important to do your research before you buy a plan.
What’s Covered Under Long-Term Care?
While traditional senior healthcare insurance policies help pay for immediate medical expenses, such as a doctor’s visit or a surgery, long-term care policies cover basic needs over an extended period of time. This is important especially for people who have been diagnosed with chronic illnesses, like Alzheimer’s or Parkinson’s disease, and need help with everyday tasks.
Whether you need coverage at home or in an assisted living setting, long-term care insurance covers out-of-pocket expenses, but usually require a certain waiting period until your benefits begin to cover those costs. Most policies are comprehensive which means they cover you in a variety of settings. According to the U.S. Department of Health and Human Services, here’s what you can expect to find in your long-term care insurance:
• Adult day service centers
• Hospice care
• Respite care
• Assisted living facilities
• Nursing homes
• Specialized care facilities, such as Alzheimer’s care
• Skilled nursing
• Occupational, speech, and physical therapy
• Personal care assistance
Cost of Long-Term Senior Care
This is where the debate on whether or not to buy long-term care insurance can get controversial. In general, the cost of senior care is very expensive. There’s no exception when it comes to long-term care insurance, and it gets more expensive the longer you wait to purchase a policy.
According to the American Association for Long-Term Care Insurance, a policy can cost anywhere between $2,000 and $7,500 depending on your situation:
Age 55 (single)
An average cost of insurance for a person in this situation, depending on where they live and their current health condition, can start at $1,764 and go as high as $3,446 per year. However, as you age the value of your policy’s coverage also increases. With an immediate value of $170,000, a policy could reach $418,000 by the time you reach the age of 85.
Age 55 (couple)
Essentially, the price for a couple in this situation would double in cost, rising from $1,764 and going from anywhere between $2,027 and $3,574.
Age 60 (couple)
Depending on the insurance provider, long-term care can cost a 60 year old couple anywhere from $2,700 to $4,204 with an average price of $3,335. You could expect to see a policy value of $708,000 by the time you are 85 years old.
Age 65 (couple)
A couple who waits until they are both at the age of 65 can expect to see long-term care insurance as expensive as $7,129, with an average cost of $4,433. At the age of 85, the value would be estimated at $611,000.
Why is it so expensive?
Simply put, long-term care insurance is costly because providing it can be risky for an insurer. Predicting the complexity and the duration of care for an insured individual is extremely difficult. On average, someone who lives in a private room in a nursing home pays $253 a day, averaging $92, 345 a year.
When should I buy?
If long-term care insurance is a good option for you, it’s best to sign up for it by the time you are 60 years old. This way, coverage for your care is there when you need it, and premiums are generally lower the younger you buy. However, if you never medically qualify for care, you do not get reimbursed.
Alternatives to Long-Term Care
If you decide that long-term care insurance isn’t a good fit for you, there are some senior healthcare alternatives available that could give you the coverage you’re looking for. You might consider these other options to help inform your decision-making process:
• Whole life insurance policies with a chronic illness rider are becoming more popular amongst older adults. With this option, if you do need long-term care insurance, you can use your death benefit to cover your expenses, tax free. If you don’t need to cash in on long-term care, your beneficiaries can receive your benefit at the time of your death.
• Critical care or critical illness insurance offers lump-sum payments to people who are diagnosed with life-altering illnesses such as cancer or who suffer a heart-attack or stroke. However, you should do your research before buying this type of senior healthcare coverage to see how long your coverage lasts and how much it will cover.
• Most short-term care insurance plans will cover long-term care for a specified amount of time, usually between 180 and 360 days. This is great for people who are predicted to recover from their illness or disease. This will decrease the cost of your premium since there is a fixed amount of time you can receive long-term care.
Navigating the Cost of Senior Care with Maplewood Senior Living
Navigating healthcare for your later years can be difficult no matter your circumstance. Remember that if you currently have a long-term care insurance policy, they are all different. At Maplewood Senior Living, we understand the complexity of these decisions, and offer our support in many different ways. We are happy to review your policy with you and help determine what is covered for assisted living. If you’re interested in learning more about your options, please don’t hesitate to call us or schedule a tour.