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Long Term Care Insurance

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Elderly couple reviewing long term care policy papers

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Research shows that at least 70 percent of people over 65 will need long term care services in the home and other settings including nursing homes and assisted living. The average age of people buying individual long-term care insurance today is about 60, while those purchasing policies offered at work are closer to 50 years old. It may come as no surprise that it costs considerably less to buy coverage when you are younger. Just like health insurance, the cost of long term care insurance depends on the type of policy and how much coverage is selected.

What's covered

Most policies sold today by insurance companies are comprehensive in nature, meaning that they typically provide coverage that allows you to use your daily benefit in multiple settings. These settings usually include your Home, Adult Day Care Centers, Assisted Living, Alzheimer's Care Facilities, Nursing Homes, Hospice and Respite care. Policies for in-home services commonly cover skilled nursing care and rehab care such as occupational, speech and physical therapy. It is also important to check whether supportive care services are covered by your policy including meal preparation, housekeeping, shopping, and transportation. These supportive services are often reimbursed by long-term care insurance when provided in combination with personal care services from a non-medical homecare agency. Supportive care is what most people need to help them stay in their homes and age comfortably in place.

How it works

When you purchase a long-term care policy, the buyer pays a pre-set premium until services are needed. Once services start, they are paid for up to a designated coverage limit. In most cases you are not required to pay premiums while receiving long-term care. Be aware that the insurance company may raise the premium on your policy, therefore, diligent research about the policy is recommended prior to purchase. It is always sound practice to request information on premium rate history about the company under consideration.

Buying a policy

Unfortunately, there is no such thing as a "one-size-fits-all" policy in regards to long term care insurance. It is often easier to decrease your coverage then increase it, especially in the event that your health declines. Most people buy long-term care insurance directly from an insurance agent, a financial planner, or a broker. Although there are more than 100 companies offering long-term care insurance, each state regulates which companies can sell policies. The easiest way to find out which insurance companies offer long-term care coverage in your state is to contact your state's Department of Insurance.

Partnership Qualified Policies

In some states the residents may find long term care coverage through a State Partnership Program. This program connects "Partnership Qualified" long term care insurance policies with Medicaid. The Long Term Care Partnership Program is a federally supported, state operated initiative that allows individuals who purchase a qualified long term care insurance policy to protect a portion of their assets that they would usually need to exhaust prior to qualifying for Medicaid coverage. As a result, it's possible to get Medicaid coverage and still take advantage of your long term care insurance benefits.

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