Long-Term Care Insurance Basics

Do you think you know all you need to know about long-term care insurance? Do you and your spouse have a long-term care insurance policy? If so, you may be interested to know that the long term care insurance industry has been faced with a high demand for the coverage and the challenges of keeping the policies affordable for those making the investment in it.

Individuals looking to purchase these policies have likely noticed that the premiums have been on a steady incline, especially if they looked several years ago, but put off making a purchase. The reason for the increases in premiums is that once these policies are called upon to pay out, the claims are expensive.

There are now fewer than 20 insurers that provide long term care insurance policies, where there were more than 100 a little over ten years ago. Insurers also report they deny coverage to one in five applicants and the rejection rate is even higher if you’re age 50 or older and are trying to purchase a policy.

Add to the fact that many of the Baby Boomers are disabled or obese and insurers say, it’s a bad risk for them to underwrite. The executive director of the American Association for Long-Term Care said if an individual has a disability placard in his or her car, they are immediately disqualified for coverage.

What can seniors do?

Purchasing the policies prior to turning age 50 or before health conditions set in is one of the best ways to ensure you may qualify for coverage and benefits. Those looking to purchase these policies today need to understand that the long term care policies of the past, in some cases, provided lifetime benefits and an automatic five percent increase as inflation protection, but today’s policies no longer offer those advantages.

One benefit that insurers have put in place is coverage for in-home health care rather than having to be admitted to a nursing home in order for the coverage to take effect. This is ideal for those individuals who are determined to age in place and are more comfortable with the idea of being cared for in the home for as long as possible.

While insurance typically does not cover home medical alert systems, having one in the home along with wearing the waterproof pendant –coupled with long term care insurance – may make it possible for more individuals to age in place.

What are some of the benefits of a long-term care insurance policy? Consider these:

• Statistics show that seven in ten Americans will, at some point, require long term care. The average length of care is three years.
• Today’s long-term care policies include guaranteed purchase options and these provide a way for the insurance policy holder to increase the coverage as they age.
• Today’s long-term care policies provide tier options that play to the assumption that “some coverage is better than no coverage.”

If you’re a caregiver, it may make sense to check into both long term care insurance for your aging loved ones as well as home medical devices.