Insurance can be confusing and overwhelming, especially if you’re considering policies that will protect you or your loved ones should something happen to you. It can be tough to discuss final expenses or costs your family will need to take on should you pass away. It can be even more difficult to consider the possibility of needing long-term care due to injury or aging, even though 70 percent of Americans will need some form of long-term care in their lifetimes. Long-term care (LTC) insurance is a great tool for many people, especially as they approach their later years. It helps protect your assets while ensuring you have access to quality care when you need it most. But what exactly does LTC insurance cover, and when is the best time to invest in it? Below is a long-term care insurance FAQ list that may help you understand the basics of LTC coverage.
What does LTC Insurance Cover?
LTC insurance is designed to cover services that aren’t typically covered by traditional health insurance or Medicare. This includes assistance with daily activities such as bathing, dressing, eating, and mobility. Coverage often extends to care provided in:
- Nursing homes
- Assisted living facilities
- Adult day care centers
- In-home care services
- Hospice care
It may also cover expenses related to home modifications, such as installing wheelchair ramps or paying for a caregiver. LTC insurance ensures that you or your loved ones can afford the type of care that helps you maintain your dignity and independence.
What could long-term care cost if I choose not to invest in insurance?
Without LTC insurance, the costs of long-term care can quickly add up. Here’s a snapshot of average annual costs in the U.S. as of recent reports:
- Nursing home care: $108,000 for a private room
- Assisted living facility: $54,000
- In-home care: $28 per hour for a home health aide
These costs can easily drain your savings or force family members to step in as unpaid caregivers. Long-term care is not typically covered by health insurance, disability insurance, or Medicare, so it is important to invest in a quality, comprehensive LTC insurance plan. Investing in LTC insurance provides financial security and helps protect your family from shouldering the full burden of care.
How much is the monthly premium for LTC insurance?
The cost of LTC insurance premiums can vary widely based on several factors, including:
- Your age when you purchase the policy
- The amount of coverage you select
- Your health and family medical history
- Additional riders or benefits
On average, a healthy 55-year-old might pay anywhere from $100 to $250 per month for a policy. However, waiting until you’re older to purchase coverage can significantly increase the cost. To get a long-term care insurance quote, call our life & financial department at (888) 539-1633.
When should I consider buying LTC insurance?
Most policyholders invest in LTC insurance later in life, but the earlier you apply the better in most cases. The earlier you purchase LTC insurance, the more affordable your premiums will be. Many experts recommend buying in your 50s or early 60s when you’re still relatively healthy. Waiting too long can not only increase your premiums but also limit your eligibility, as pre-existing health conditions could disqualify you from coverage.
Will my premiums increase as I get older or if I file a claim?
Most LTC insurance policies are designed with stable premiums, meaning your premium won’t automatically increase just because you age or file a claim. However, insurers can raise premiums for an entire group of policyholders if they receive approval from state regulators. While this is relatively uncommon, it’s worth reviewing your policy’s terms to understand how rate increases might be handled. Your LTC premium will never go up due to your age, health condition, or if you file a claim.
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We hope this information on the basics of LTC coverage is helpful.
This article was updated on December 19, 2024.
If you’d like to learn how we can help you plan your retirement, call Empower Brokerage to speak to one of our Life and Annuity experts (888) 539-1633
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