It's likely that at some point in your life you will need assistance with your daily activities. In fact, the U.S. Department of Health and Human Services estimates that 70% of people over age 65 eventually will need long-term care, whether in a home setting, a senior living community, or a nursing home.
Long-term care insurance can help cover the costs of these services and may help you preserve your financial resources. Just follow a few guidelines and keep these factors in mind if you're thinking about purchasing coverage:
Look at long-term care insurance well before you need it. The longer you wait to purchase a plan, the higher your initial premium may be. Also, if you wait, it's more likely you'll have developed a health condition that may disqualify you from getting coverage. While there's no "right" age to buy, the American Association for Long-Term Care Insurance estimates more than half of long-term care policies are purchased by people ages 55 to 64.
Coverage and cost vary, so shop around for a plan that will be reasonably affordable based on the coverages you want, rather than choosing the first one you find.
It's not always easy to evaluate plans. Compare these key features:
- Benefit trigger. The criteria or event the insurer uses to determine when your policy will go into effect.
- Elimination period. The number of days you'll pay for care out of your own pocket before you begin receiving benefits. Thirty days is the minimum elimination period for many long-term care plans.
- Daily benefits. The amount the policy will pay on a daily basis. Some plans pay benefits based on the hours of service, such as the number of hours a home health aide visits your home.
- Inflation adjustment. A feature that helps your benefits keep pace with rising costs.
- Types of services. A description of what's covered under each plan and where you may receive this care at home or in an assisted living residence, adult day care facility, nursing home, or other setting.
- Duration of benefits. The length of time you'll receive benefits, from a few years to as long as you live.
- Exclusions. Stipulated conditions or acts that the benefits won't cover. These could include conditions caused by alcoholism or dangerous behaviors.
Learn more about long-term care insurance from the HHS National Clearinghouse for Long-Term Care Information.
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