Life Insurance and Personal Protection Strategies
Long Term Care Insurance
Recent Statistics from the U.S. Department of Health and Human Services report that about 52% of Americans turning 65 years of age will require some type of Long-Term Care Services in their remaining years. Long Term Care Services generally refer to Custodial, Intermediate, and Skilled Nursing Care Services that are administered in a home setting or at various facilities which may include assisted living facilities, rehabilitation facilities, as well as nursing homes.
Although most people think of health care services as being medical, the majority of Long-Term Care Services are “Custodial” in nature which typically constitute services known as “Activities of Daily Living” or ADL’s. Most commonly, ADL’s include help with Eating, Dressing, Bathing, Transferring and Toileting, as well as help with a cognitive impairment. Long Term Care Insurance provides financial coverage for Custodial Care at home and/or Long-Term Care services which may be administered in at-home settings as well as in an intermediate or longterm care facility. For most policies, the qualifying criteria for receiving benefits is when a person is unable to perform or has great difficulty performing at least 2 of the six aforementioned ADL’s. The main reason for having a Long Term Care policy is because “Custodial Care” is generally not covered by standard health insurance policies or Medicare, and Skilled Nursing Care is typically covered on a very limited basis by health insurance and Medicare. Depending on the type of care needed, duration per day, whether it’s at home or in a facility, and the credentials of the care-giver, the cost of care can easily vary from approximately $ 20,000 per year to well over $ 100,000 per year. Long Term Care benefits are customized for each insured’s policy. Typically, a pool of money is created by determining a daily benefit multiplied by the number of days and years you would like to provide coverage for. Most insureds typically insure themselves from between two and six years of coverage with an average daily rate that is generally based on the amount of care they would like to receive.
Although the top 1% of affluent Americans can typically afford to self-fund the need for long term care services, procuring a long-term care policy is a much more economical way to pay for this care. Even those who can easily self-insure, often find it more economical to own policies not only for themselves, but especially for relatives who they will most likely need to financially assist. For those who are not necessarily in the top 1% but are financially comfortable, the purchase of a long-term care policy is even more compelling. It makes a lot more sense to allocate monies for long term care premiums, knowing that benefits will be there when most needed. One point to note is that many clients will partially insure themselves with a long-term care policy and self-insure an additional amount. In this way, your other financial strategies and obligations are protected from being impacted by the unexpected cost of a longterm care event. In addition, it alleviates the concern that your assets which may serve to support you or to provide for your children will be maintained intact.
We would be happy to assist you in obtaining this important coverage.
