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The Time To Think About Long-Term Care Insurance is Now

By Daniel @ LivingSenior - November 11, 2011

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Insurance is a simple concept to embrace. You buy a policy to cover your car, home or other property to compensate for any type of damage or loss. The same principle applies to health insurance as well: you buy a policy to pay for any medical costs that might crop up throughout your life. Understanding this means that the best type of insurance policy is one you never have to use!

When it comes to senior care, there are specific long-term care policies that can cover all kinds of costs with regard to specialized care that might be needed in a nursing home, assisted living facility or residential care. It can even cover hospice care. Unfortunately, many insurance companies put the number of seniors who carry long term care at around 10% which is extremely low considering just how many seniors might need this kind of help.

Long-term Care Insurance Premiums vs. Pay-outs

A basic long-term insurance policy premium can cost on the average of $200 a month. In exchange for that, you can expect around $150 a day for up to three years. Although that might seem like a pretty decent return, for a senior living on a fixed income $200 a month might be a challenge to swing especially with many other types of outstanding bills.

You also have to factor in when you might tap into a long-term health insurance policy. The average time for claims is when a person enters into their late 70s or early 80s. If you begin paying for that policy when you retire, you can see how those payments will rack up.

Given the complexity of these policies, experts agree it's tough to decide whether they're right for you. The policies have many moving parts: After a waiting period, they generally pay a set daily benefit for a certain number of years. They typically cover care in a nursing home, an assisted living facility or at home.

The Affordable Care Act

While it is true that the Affordable Care Act is supposed to prevent people with pre-existing conditions from being kicked off insurance policies, there is no guarantee yet that insurance companies can’t raise their premiums for this type of specific policy. In fact, MetLife and John Hancock have both asked regulators to approve a premium increase of up to 40%.

A new policy enacted as part of ACA is the Community Living Assistance Services and Support Act or Class act. This is a new type of program that provides financial assistance to folks who have been diagnosed with cognitive impairments to pay for custodial care in their own homes. In some cases these funds can also be applied to nursing home reimbursements. This plan won’t go into affect until 2012 and you need to make premiums for five years before becoming eligible to file a claim.

The alternative is to apply for Medicare or Medicaid help but this is only offered to seniors who can demonstrate a need. In other words, if you have assets but don’t have long-term care you might be out of pocket for any expenses. It’s best to consider all your options to make the best choice for insurance.

You can learn more about the benefits of long term care health insurance by visiting LivingSenior.com.

Do you have long-term care insurance policy? What were the benefits you looked for with that policy? Let us know!