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Making arrangements for long-term care

POSTED: December 12, 2008 5:00 a.m.

Long-term care refers to the many services beyond medical care and nursing care used by people who have disabilities or chronic (long-lasting) illnesses. Long-term care insurance helps you pay for these services, which can be very expensive. A policy also ensures that you can make your own choices about what long-term care services you receive and where you receive them.

Ordinary health insurance won’t cover it
People are living longer and longer these days. That’s good news, but the flip side of that is there are more years in which there’s a risk of serious health problems. And that could literally cost all of your remaining life’s savings.

Unfortunately, ordinary health insurance policies and Medicare usually do not pay for long-term care expenses. Medicaid, a federal/state health insurance program, will only pay for long-term care if you’ve already spent most of your savings or other assets. So, there’s long-term care insurance.

Long-term care insurance typically covers the cost of:
Help in your home with daily activities like bathing, dressing, eating and cleaning.

Assisted living services that are provided in a special residential setting other than your own home. These services may include meals, health monitoring, and help with daily activities.

Visiting nurses.

Care in a nursing home.

When is the right time to buy a policy?
The best time to buy long-term care insurance may be middle-age. It’s the time when you have the highest likelihood of being eligible for a policy and, just as important, when premiums costs might be lower.

Is a policy right for you?
Long-term care insurance is probably not for everyone, but — with soaring health care costs, insurers increasingly restricting coverage and eligibility, and people’s need to stretch retirement savings through more years — it’s a good idea to consider it seriously. Your goals should be to protect your assets, minimize your dependence on other family members, and control where and how you receive long-term care services. On the other hand, consider the cost, Long-term care insurance can be expensive, especially the longer you wait to purchase.  

Key issues to review
Be sure you consider each of these issues:

Coverage. You can choose long-term care policies that pay only for nursing home care, or only for home care. Or, you can opt to purchase coverage for a mixture of care options that includes nursing home, assisted living and adult day care. Some will pay for a family member or friend to care for you in your home.

Daily or monthly benefit. The daily or monthly benefit is the amount of money the insurance company will pay for each day or month you are covered by a long-term care policy. If the cost of care is more than your daily or monthly benefit, you will need to pay the balance out of your own pocket.

Benefit period. Your benefit period determines the length of time you will receive benefits from your policy. You can choose a benefit period that spans from two to six years, or the rest of your life.

Elimination or waiting period. During this period, you must pay all of your long-term care expenses out of your own pocket. The longer the waiting period is, the lower your premiums will be.

Inflation protection. With health care costs rising to new heights every year, buying a policy without inflation protection is probably buying a policy that won’t cover much of your expenses.  

Non-forfeiture benefit. Policies with this benefit will continue to pay for your care even if you stop paying premiums.  

Consumer tips
Like many other things we purchase it’s wise to shop and compare policies. When you get your policy, review it right away to be sure it covers what you paid for. You also have a “free look” clause that lets you cancel your policy within a certain number of days after you’ve signed and paid for it.

If you would like more information please call me at 754-1226.

Mark Czachowski is a financial representative with the Czachowski Insurance Agency in Springfield.

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