Thinking about the need and
the costs of long-term care is enough to make anyone uncomfortable. But while
it's a difficult subject to talk about, it's also a topic that often generates
lots of questions and misunderstanding.
Consider this: The average cost of nursing home care in the United States now exceeds $70,000 per year, with wide ranging variations from state to state.*
Consider this: The average cost of nursing home care in the United States now exceeds $70,000 per year, with wide ranging variations from state to state.*
Who Pays?
For the most part, those who need long-term
care are left to foot the bill on their own. Neither Medicare, nor Medicare
supplemental coverage ("Medigap"), nor standard health insurance
policies cover long-term care unless you are impoverished. That's why long-term
care insurance is so important. Since premium costs are based on your age and
health at the time of purchase, the younger and healthier you are when you
purchase a policy, the lower the premium you're apt to pay during the life of
the plan.
As you evaluate long-term care insurance, keep the following
variables in mind:
- Coverage
Parameters.
Policies will differ in the types of services they support. Be sure to
choose a policy that best meets your particular needs.
- Benefits
Payout.
How much does the policy pay per day for care in a particular setting? How
does the policy pay out? (e.g., a fixed daily amount, as reimbursement for
the cost of care up to a daily maximum?) Does the policy have a maximum
lifetime limit?
- Eligibility. Does the
policy use certain "triggers" to determine benefits eligibility,
such as the formal diagnosis of an illness or disability? What is the
maximum issue age for the policy?
- Women May Need
More.
Longer life spans for women may signal the need for additional coverage.
Finally, keep in mind that most long-term care policies sold
today are federally tax-qualified, which means premiums paid and out-of-pocket
expenses are deductible. Also, long-term care benefits received are not taxed
as income up to certain limits.
*Source: AARP, 2007.
© 2010 Standard & Poor's Financial Communications. All rights reserved.Tracking # 670203
*Source: AARP, 2007.
© Carmen Coleman, President and CEO
Lifetime Financial Group, LLC
30 W. Broad Street, Suite 300
30 W. Broad Street, Suite 300
Rochester, NY 14614
(585)325-2525
