Long Term Care Insurance has grown in popularity over the years. More people are buying this type of insurance because they are concerned about their ability to afford the high costs of nursing home stays and home care assistance. Medicare only covers nursing home stays and home health visit under certain circumstances.

Long Term Care Insurance is designed to pay for short or long term nursing home expenses and custodial care at home. Long Term Care benefits will generally cover an array of living situations that may include some assisted living and adult day care settings. The policy will define very clearly what inpatient and outpatient alternatives are covered. Most current policies, however , offer great flexibility.

All Long-Term Care policies trigger benefits if an insured looses two or three activities of daily living (ADL's).

ADL's are usually defined as:

Ability to dress.
Ability to eat.
Ability to toilet.
Ability to bathe.
Ability to transport yourself without a wheelchair.
Continence.
Ability to move in and out of a bed or chair.
Cognitive impairment.
Depending on the policy, benefits will commence once two or three of the ADL's are inpaired.

Cost of Care

If you have not been exposed to the costs of nursing care or home care custodial visits, you may be shocked. On average, it costs about $ 120 to $150 per day to be in a nursing home in Colorado. On average, nursing home care will run about $36,000 per year. In the United States here are some general long term care statistics.

43% of people who reach age 65 will require some kind of long-term care.
1.3 million people are in nursing homes and 7.5 million people require some form of home care or community care.
About 22 million families are providing some form of unpaid home care for a relative or friend.
Over 50% of nursing home stays are for one month or less.
Over 27% of nursing home stays are for over a one year period of time.
About 30% of the elderly will become impoverished by a three-month stay in a nursing home that is uninsured.

Who should buy a long-term care policy?

Not everyone can afford long-term care coverage. Who should own a policy? A good candidate for long term care would meet one or more of the following criteria.

You want your children or grandchildren to inherit some of your wealth. You have enough monthly income to pay for a long-term care plan. You are not living at the poverty level. You have assets of $50,000 or more.

If you find that you or your parent does not meet the above criteria, you may be best off meeting the Medicaid criteria. In Colorado, Medicaid will pay for nursing home care once you or your parent meets the poverty criteria. However, if you or your parents have the funds to pay for a long term care policy , why would you want to lose all your assets to forgo paying an insurance premium?? There are Federal and State laws that address divestment for the purpose of meeting Medicaid eligibility. You want to be very certain that you are not intentionally divesting assets to qualify for Medicaid. In fact, if Medicaid staff feel this has occurred, assets that were divested will be pulled back into your financial picture and you may be deemed ineligible for Medicaid until you spend down your income or assets.

How do I buy Long Term Care Benefits?

There are three factors that are used in purchasing long term care benefits:

Daily Benefit Amount - Do you want to be paid $100 or $110 or $130 per each day of nursing home care? You can purchase from $50 to $250 of daily benefits that are paid to you, the insured.
Benefit duration - How long do you want to purchase benefits for? Do you want a two-year benefit, five years or a lifetime unlimited benefit. Naturally, the longer you want benefits to be paid, the more expensive the policy.
Home care benefit - Home care or custodial care is always a part of the policy.

However, you have a choice of having the home care benefit being paid at 50% of the nursing home daily benefit or at 75% of the daily benefit. In any case, this is an essential part of long-term care insurance.
When quotes are developed for long term care we will use a $120 daily benefit and get quotes for two years, five years and unlimited lifetime. We will also procure Cost of Living adjustments so that the daily benefits keep pace with inflation of nursing home costs. If you would like a quote for Long Term Care Insurance Insurance, please click here to email us.