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An Eye-Opening Look at Long Term Care Insurance--The Good, Bad and Risks

October 10th, 2016

Is Long Term Care insurance
worth the price? It is valuable or a roll of the dice? BrightStar Care Evanston Examines the Facts


Here are some facts we all have face as we age, even if they are slightly unsightly:

  • 70% of people turning 65 are likely to need long-term care, reports the Dept. of Health and Human Services
  • Yikes, what a price! One year in a nursing home (in 2015) averaged more than $92,000 for a private room. You pay 100% of the cost for each day you stay in a skilled nursing facility after day 100 when Medicare stops.
  • More than 7 million Long Term Care (LTC) insurance policies are currently in effect, though the industry has shrunk recently as the cost of LTC has risen and the benefits of insurance have constricted

So let's answer some important questions we asked at BrightStar Care Evanston. First, what is Long Term Care (LTC) and Long Term Care Insurance (LTCI)? (2) How much can LTCI help? (3) How much does it cost? (4) How long does it last?
(5) Is it risky business and a roll of the dice? BrightStar Care Evanston has informed answers for all these questions. You'll find answers here--especially about the basics of LTCI and risks to examine. And you can get answers to everything else with a quick click to our in-depth article on Long Term Care Insurance on our website.
What is Long Term Care (The Basics)

The short story of Long Term Care is that it includes a range of services and support that are available to us as we age and need increased assistance. Surprisingly enough, most LTC is not sophisticated medical care, but rather assistance with the basic tasks of everyday living (ADL): dressing, bathing, eating, etc. Long Term Care does extend to skilled nursing care and counseling people with regard to management of their financial assets to make sure you're covered for medical needs later on in life.

If you need care in a nursing home (beyond 100 days), one of the ways you can get financial assistance to defray major costs is through Long Term Care Insurance. Most LTC insurance policies sold today are comprehensive; they typically allow you to use your daily benefit in a variety of settings, including:

  • Your home (that's where BrightStar Care Evanson can come in)
  • Adult day service centers
  • Hospice care
  • Respite care
  • Assisted living facilities (also called residential care facilities or alternate care facilities)
  • Nursing homes

As we noted earlier, you can learn more about how much Medicare pays for care in assisted living facilities and nursing homes. You can learn about costs for in-home care versus assisted living and nursing home care and much more about meeting your long term medical needs on our BrightStar Care Evanston website. Since we have limited space here, however, let's jump to research we've conducted regarding the risks and cautions of Long Term Care Insurance that can help you if you decide to buy a policy.
The Risks--Where Long Term Care Can Get Dicey 

Long Term Care insurance can protect you if your policy is good and your timing is right. You should also pay attention to the following cautions when talking to your insurance agent or company.

Be Aware of
"The Waiting Period" 

In 2015, the average waiting period for benefits to kick in was 3 months (93 days). You can buy a policy that starts from day one and continues forever; all you have to do is be willing to pay more for that privilege each month. And the extra money you pay can go on for years.
Be very careful of this: some policies include the waiting period as part of the coverage period. You and your insurance policy can do better than that.

Match Coverage to Needs
Make sure the coverage matches the risks you're most likely to face. If you're genetically prone to heart disease, take that into account and whether nursing home care is likely to be needed versus services of in-home care.

Be Careful of Compromising
Ensuring more coverage and shorter wait periods before the policy kicks in means more expensive premiums, which can become cost-prohibitive over time. That's when people often compromise and cut their coverage, which may cut them out of benefits when financial help is really needed.

Beware Inflation & Rate Hikes
Try to ensure that your policy includes inflation protection. Right now, inflation is minimal, but look 5 years down the road and it could be a different story. Professionals advise that, on average, you can expect a bump in rates of 3% to 5% a year, which may or may have anything to do with inflation.
Use it or Lose it
You can spend years paying into a policy and fail to use it at all. Sad to say, if it goes unused, you lose; your long term insurance policy goes away. For this reason you may want to consider a "return of premium rider" for a slight additional cost.
The Early User Catches the Benefits
Using your benefits right away, instead of saving them for a rainier day is recommended. Intervening with home care earlier in a disease or aging process can help prolong your ability to stay at home, and stave off the need for a higher level of care or relocation to a nursing home.
Nurse the Idea of BrightStar Care Evanston
When you reach the point where you need the services of LTC, you may get part or all of those services from a nursing home. But of course, a nursing home isn't home-sweet home is it? That's where BrightStar Care Evanston and BrightStar Care North Suburban shine. We're there for you and your loved ones 24/7/365 -- for the long term with skilled nursing care at home -- or the short term with part-time nursing care or help with ADL's if needed. And financial assistance from Medicare and other organizations like the Veteran's Association may be available to you. Let's talk.

Contact BrightStar locally at (847-510-5750) to get all your questions answers. And if you need help right away...


Medicare.gov: https://www.medicare.gov/coverage/home-health-services.html

Genworth Financial: https://www.genworth.com/