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Tuesday, September 9, 2014

5 tips for long-term care insurance

Let’s start with some good news: Americans are living longer. But that comes with bad news: We’re getting sicker, too, so our increased longevity means more and more of us will require long-term care. In fact, research from the Centers for Medicare & Medicaid Services reveals that at least 70 percent of people 65 or older will need long-term care at some point in their lives. The duration and demands of the care required often exceed what family and friends can provide — or what many of us can afford with our own savings.
Dalih Suchet, a 15-year long-term care insurance specialist with Whitehall Benefits of Nashville, says:
“Those you love would likely drop everything to take care of you. But trying to have conversations and make decisions in the midst of crisis is difficult and can lead to poor decisions. Having a plan and talking it through with your loved ones in advance can help your family members ensure that your intentions are achieved. It can also ease the emotional, physical and financial toll of caregiving on your family members.”
That’s where long-term care insurance steps in. Health insurance doesn’t pay for extended, nonmedical care at home or in an assisted-living facility or nursing home. Neither does Medicare. And while Medicaid does offer help, most recipients must first exhaust most of their assets in order to qualify. These costs can be staggering. According to the insurer Genworth, the median rate for a private nursing home room in Tennessee is $198 a day or $72,088 a year. For an in-home health aide, it’s $18 an hour. In addition, do not forget the medical expenses not covered by health insurance.
1. Calculate how much coverage you’ll need. The average policy covers $149 of expenses daily. To determine how much coverage you’ll require, call an in-home aide service, nursing home or assisted-living facility that you might like to use one day and ask them their per-day cost. Factor inflation into your calculation because the cost of health care continues to climb. According to CPI, healthcare inflation is currently about 2.5 percent, but the long-term average is closer to 6 percent. Next, consider how long your coverage should last. Only about 20 percent of people stay in a nursing home more than five years, so that’s a good minimum time frame. If long-term care insurance is not in place, paying for care will quickly drain income and/or assets.
Know if your benefit payout is daily or monthly, Whitehall Benefits’ Suchet says.
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