Facts and Misconceptions


Getting older is a well deserved point in any individuals life and has the unparralled benefit of enjoying the finer things in life. However, a long life takes a toll on both the physical and financial health of our nations senior citizens. Long term care insurance responds to the needs of senior citizens due to the fact that chances are you’ll need long term care after the age of 65. Elderly care is costly, and long term care insurance is there to help. Studies show average costs for a full time nursing service range between $50,000 and $80,000 per year, depending on if the care is given in a facility or at home (with facility care being the more expensive option). A byproduct of the complexities behind long term care are a series of misconceptions that can deter a senior citizens financial health.

  • Misconception One: Medicare will cover me: This misconception is listed first because it is the most widespread myth. Medicare does cover hospital and doctor costs. However, it’s coverage does not include custodial care for seniors with long term illnesses. For example, if eating, bathing, or remembering medications is a problem, Medicare will not cover the needed aid for these unfortunate health aspects.
  • Misconception Two: My spouse’s help is enough for such pressing matters: Your spouse may be able to support your needs adequately, but this assumption is not guaranteed. For example, you could outlive your spouse, your spouse may not be able to offer constant supervision (typical of Alzheimer’s patients), or your spouse’s aid couldn’t support you in the event that you become physically disabled.
  • Misconception Three: Long Term Care is for everyone: Long term care is optimal for people who live off an average sized income. Premiums can be costly for low income individuals and those whose income is more than average opt out of insurance coverage because they have the means to pay for services on their own. Further analysis of both your income and marital status are important to take into question. Aside from your home assets, single persons with $30,000 or less in assets and married people with $80,000 or less in assets most  likely cannot afford the costs associated with long term care. Still, if you wish to obtain long term care and your assets are less than recommended, paying out of pocket and utilizing Medicaid is your best option. As for protected assets, consider LTC if you are skeptical about being able to self insure.
  • Misconception Four: Premiums remain constant: The promise of guaranteed LTC premiums is something that no company will offer. Key to their business is that they have the legal right to increase premiums if investment earnings and overall claim costs see fit.

 

Consumer Resources

  • Misconception Five: I should wait until I retire to apply for long term care: Procrastinating your application for long term care more often than not results in unfavorable outcomes. For example, if you apply after you’ve developed some sort of ailment typically covered by LTC you’ll likely not be able to obtain the best rates as you would have had you applied earlier. In addition, you may not even qualify in general if you put off long term care insurance.
  • Misconception Six: Long Term Care is the same as nursing home insurance: While long term care covers nursing homes/assisted living, most claim dollars are not spent on these amenities. Most claim funds come from health care in the home.
  • Misconception Seven: The Elimination Period: The policy does not pay off immediately. It typically takes 90 days for reimbursement to take place. Once you meet the requirements for benefit qualification you start paying for services from a legitimate provider. If your unable to do two of the following: bathe, dress, eat, use the bathroom, then you can start getting coverage. These are not the only disadvantages that can commence coverage. Mental impairments that risk your safety are also grounds for coverage. The elimination period is not an option either. For example, if you wanted to rely on friends and family for help during the 90 days, the insurance company won’t recognize that as having services provided. The insurance company must approve whoever is providing aid.
  • Misconception Eight: I can’t afford the quote: LTC policies are flexible, and an initial price can be altered to bring down the cost. For example, years of coverage or daily benefits can be reduced to drive down cost. The best way to make this product more affordable is to work with a reputable financial advisor, as they will help customize the insurance package that is right for you.

For more information see these Facts about Long Term Care

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