Damon Harris 2015-12-05 00:41:10
It's a fact: People today are living longer. Although that's good news, the odds of requiring some sort of long-term care increase as you get older. And as the costs of home care, nursing homes, and assisted living escalate, you probably wonder how you're ever going to be able to afford long-term care. One strategy that is becoming common is long-term care insurance (LTCI). What is long-term care? Most people associate longterm care with the elderly. But it applies to the ongoing care of individuals of all ages who can no longer independently perform basic activities of daily living (ADLs)--such as bathing, dressing, or eating- due to an illness, injury, or cognitive disorder. This care can be provided in a number of settings, including private homes, assisted-living facilities, adult day-care centers, hospices, and nursing homes. Why you need long-term care insurance (LTCI) Even though you may never need long-term care, you'll want to be prepared in case you ever do, because long-term care is often very expensive. Although Medicaid does cover some of the costs of long-term care, it has strict financial eligibility requirements--you would have to exhaust a large portion of your life savings to become eligible for it. And since HMOs, Medicare, and Medigap don't pay for most long-term care expenses, you're going to need to find alternative ways to pay for long-term care. One option you have is to purchase an LTCI policy. However, LTCI is not for everyone. Whether or not you should buy it depends on a number of factors, such as your age and financial circumstances. Consider purchasing an LTCI policy if some or all of the following apply: • You are between the ages of 40 and 84 • You have significant assets that you would like to protect • You can afford to pay the premiums now and in the future • You are in good health and are insurable How does LTCI work? Typically, an LTCI policy works like this: You pay a premium, and when benefits are triggered, the policy pays a selected dollar amount per day (for a set period of time) for the type of long-term care outlined in the policy. Most policies provide that certain physical and/or mental impairments trigger benefits. The most common method for determining when benefits are payable is based on your inability to perform certain activities of daily living (ADLs), such as eating, bathing, dressing, continence, toileting (moving on and off the toilet), and transferring (moving in and out of bed). Typically, benefits are payable when you're unable to perform a certain number of ADLs (e.g., two or three). Some policies, however, will begin paying benefits only if your doctor certifies that the care is medically necessary. Others will also offer benefits for cognitive or mental incapacity, demonstrated by your inability to pass certain tests. What's it going to cost? There's no doubt about it: LTCI is often expensive. Still, the cost of LTCI depends on many factors, including the type of policy that you purchase (e.g., size of benefit, length of benefit period, care options, optional riders). Premium cost is also based in large part on your age at the time you purchase the policy. The younger you are when you purchase a policy, the lower your premiums will be. Comparing LTCI policies Before you buy LTCI, it's important to shop around and compare several policies. Read the Outline of Coverage portion of each policy carefully, and make sure you understand all of the benefits, exclusions, and provisions. Once you find a policy you like, be sure to check insurance company ratings from services such as A. M. Best, Moody's, and Standard & Poor's to make sure that the company is financially stable. When comparing LTCI policies, seek assistance from a financial professional. As a LPL Financial Planner, my personal goal and commitment is to spread the word of financial literacy and to assist you through the process of developing, implementing and pursuing your financial goals. My passion and commitment to my client’s satisfaction is the driving force that powers me to excel. I hold myself accountable to the highest standards, while staying true to my personal values (family, honesty, integrity & respect) to ensure strong, long lasting client relationships. Please visit our company website at www.rivcowealth.com to learn more, or take advantage of my open door policy and call me directly at 951-638-4015. CA Insurance Lic# 0E00627 Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor. Damon Harris is a registered representative with, and securities and advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC
Published by Moreno Valley Business Journal. View All Articles.
This page can be found at http://mypub.iebjpub.com/article/Understanding+Long-Term+Care+Insurance/2340631/283711/article.html.