Learn about senior care insurance. Seniorly explains that although few people take advantage of it, long-term care insurance can make a big difference.
If your elder loved one recently fell ill or experienced an injury, then you might know how valuable respite care can be. By providing them with specialized services and round-the-clock attention, respite care can turn a difficult situation into a manageable one and help your loved one regain their health. However, it can also be expensive, particularly when your loved one requires several months of care. This is why senior care insurance (or long-term care insurance) can pay off in the long run by covering added medical care expenses.
Understanding this type of coverage and considering your options beforehand will help make sure you’re not stuck trying to figure out how to pay expenses at the last minute.
Long-term care insurance (LTC or LTCI) for seniors is insurance that will cover a variety of expenses associated with long-term stays, such as at a hospital, nursing home or a respite center. Long-term care insurance generally covers additional expenses not covered by Medicare or Medicaid and can be used as a supplemental insurance for seniors.
Although it is not a widely used type of insurance policy (only 8 percent of Americans currently purchase it), a LTCI policy can help protect against the rising costs of long-term care and keep you from being burdened with any unexpected expenses.
Whether or not you qualify for a LTCI policy will depend on your health, age and current living situation. In general, the younger and healthier you are, the more likely you will be able to purchase an inexpensive policy. Long-term care insurance premiums are generally less expensive at younger ages. Shopping for a policy between 60 and 65, starting at age 55 for couples, may get you the combination of monthly affordability and a lower total investment. If you have a pre-existing health condition, are not in good health or are at an at-risk age (sometimes the cutoff for long-term care insurance is 75), it's possible that you may not qualify for long-term care insurance or that your rates will increase.
The following are some commons reasons why your loved one may be unable to purchase long-term care insurance:
Whether you are interested in purchasing long-term care insurance for respite care or simply to be safe, the following are some important factors worth considering when evaluating term care insurance policies.
When considering the right senior care insurance to purchase, understanding the differences between short-term and long-term care insurance is helpful.
Short-term care insurance (STCI) for seniors typically provides coverage for 1-year or less. There are some major differences in terms of an older cutoff age for short-term care insurance and no medical exam to be approved for coverage. Also, most long-term care insurance includes an “elimination period” where benefits may not be paid out for 90 days where short-term care typically pays benefits immediately.
Here are some key differences between short-term and long-term care insurance for seniors:
Long-term Care Insurance | Short-term Care Insurance | |
Coverage Over 1 Year | X | |
Elimination Period of Benefits | X | |
Required Medical Exam | X | X |
Cutoff Age | X | X |
There are a variety of long-term senior care insurance companies on both the federal, state and local levels. Additionally, many seniors opt to carry private insurance plans for LTCI.
Here are some of the major long-term care insurance providers:
Additionally, consider the following resources to find a policy that fits your needs:
Annuities are conservative investments issued by insurance companies that can help build a guaranteed income stream or supplement retirement savings. A long-term care rider is an optional benefit you can add to an annuity that helps cover long-term care expenses. You can access the benefit right away, or if you end up not needing it, you can pass it on to your beneficiaries. To access this benefit, you must need help with activities of daily living, such as eating, getting dressed, taking a shower or bath, using the bathroom or moving from one place to another. The health condition can be permanent or temporary.
Finally, you can always consider the ARCH National Respite Network, which has a resource for finding information about state funding sources for both caregivers and seniors.
Arthur Bretschneider is CEO and Co-Founder of Seniorly. As a third generation leader in the senior living industry, Arthur brings both deep compassion and a wealth of practical experience to his work at Seniorly. Arthur holds an MBA from Haas School of Business and has been featured in the New York Times and Forbes Magazine as a thought leader in the senior living space. Arthur is a passionate and vocal advocate for improving the lives of older adults through community, and believes strongly that structured senior living environments can positively impact the aging experience.
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