NPR recently aired an interview with geriatric care manager and author, Marion Somers, and NPR Senior Business Editor, Marilyn Geewax, as part of their “Tell Me More” series, The interview discussed both the emotional and economic challenges of aging and long-term care. One of the most surprising things that was reiterated throughout the entire piece, was the the fact that most adults are financially ill-equipped and emotionally underprepared when it comes end-of-life planning and long term care, particularly in the event of a long, slow decline.
According to Genworth Financial, at least 70% of people over age 65 will require some long-term care. In addition, 40% of people under age 65 already require long-term care. With statistics like those, it’s safe to assume that at some point either you or a loved on will need long-term care from someone with their gerontology degree.
The cost of long-term care insurance (LTCI) is also rising. Today, Americans are paying approximately $17,520 more per year for a nursing home than they did in 2005, and the cost of care is rising exponentially. The good news? LTCi , unlike other insurance products, is cheaper the earlier you purchase a policy. The “sweet spot” in age is when you’re in your mid-50’s. You don’t want to look into insurance when it’s too late and you’re already finding yourself in need of some sort of care. You should also be aware that additional factors, including, age, medical history, location of care, and your current state of health – all help determine cost.
Here are some items that I feel every LTCI policy should include:
- One year of care coverage at the very least – including intermediate and custodial care
- Nursing home or home health care should not be limited to skilled care – give yourself options
- Alzheimer’s coverage if the disease is developed after purchase of plan
- An inflation protection option to either:
- Automatically increase the initial benefit level on an annual basis
- Guarantee the right to increase benefit levels periodically without providing evidence of insurability
- An “Outline of Coverage” describing all benefits, limitations, and exclusions
- Guarantees that the LTCI plan will be there for you when you need it most; the policy should not be permitted to be canceled, non-renewed, or terminated at whim by your provider due to age or if you and are experiencing mental or physical problems
- 30 days to be able to reconsider in what is called a “free look” period so you can return the policy and receive a premium refund
Some additional items to consider:
- You shouldn’t have to fulfill preexisting conditions before being able to opt for a plan (preconditions to look out for include hospitalizations or care of any kind)
- Make sure you understand the limitations of the policy you are considering; depending on the type of policy you choose, you could be excluded from certain things that may not be covered, including supplies, medications and linens
- Consider your options with your family, and talk with a professional in order to make financially sound Long Term Care decisions