In an ideal world, everyone would be able to enter into their senior years with few medical issues.  However, everyone is somewhere in the aging process and therefore headed towards a time when they may need assistance taking care of themselves.  With the rising costs of healthcare and the increased expense related to the care of aging individuals, there exists a question of how this care will be covered.  Long-Term Care Insurance provides some answers to that question.

Long-term care insurance is an insurance policy which is designed to pay for care when you require personal medical care services due to cognitive impairment or

dementia, a significant medical condition, a disability, or other condition which necessitates this kind of care.  Individuals usually require long-term care when they are no longer able to manage their daily living tasks without assistance. Most long-term care policies will provide coverage for care in your home, an assisted living facility, a nursing home, or adult day care center.  Medicare does not cover long-term care.

Without long-term coverage, individuals have to pay the significant costs associated with this type of care from their assets until they qualify for Medicaid.  While there are measures which can be taken to protect the family assets, if you don’t plan properly some of the estate will have to be used to qualify for and repay Medicaid.

These policies are generally purchased by individuals when they are in their 50s and 60s and planning for their financial and medical futures. Steps to obtain this coverage need to be taken before the onset of a debilitating condition as you are unlikely to qualify once such a condition is present.  Like other insurance policies, you will complete questionnaires and factors such as your gender, age, general health, marital status, and family history will be taken into consideration before you are quoted a premium.  There are two main types of policies.  The first type is a traditional long-term care policy, where you pay premiums and have coverage based on those premiums.  If you die and never need to use the long-term care insurance, the policy is gone – there is no payment your beneficiaries.  The second type of long-term care insurance is a “hybrid” policy.  This is where you use insurance or another investment vehicle which will convert to long-term care coverage if you ever need it.  This type of policy does allow the policy to pay to your beneficiaries if you pass away without ever needing long-term care.  There are pros and cons to each type of policy, and we would be glad to talk with you about how each type of policy may fit with your specific situation.

With either type of policy, once you begin to pay premiums, there is coverage.  Although, the coverage will vary depending on the type of policy you purchase and the costs of your premium.  Recent developments in the insurance industry point towards a trend of some companies issuing policies with increased premium costs and less coverage for this type of care.  Therefore, it will be essential to carefully investigate the terms of your policy to ensure it adequately provides for your future care.

Planning for long-term expenses is critical for individuals approaching the years when this care may become necessary.  In this planning, long-term care insurance can indeed be a means to protect your assets as well as afford you choices in your medical care. That being said, everyone’s circumstances are unique and determining whether this coverage is right for you can be complicated. Our office can provide estate planning and long-term care advice to help you navigate the decisions related to long-term coverage as well as your other estate planning needs.  Please contact us if we may be of assistance.

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