Personal & Financial Strategies

Long-Term Care Insurance: Conserve Your Savings, Expand Your Options

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We don’t often stop to consider how we can afford care in our older years, but it’s an important conversation to have. Tim Hranka, of COUNTRY Financial, lays out a few options.

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It’s not a popular topic of conversation, but we are getting older each minute, and many of us will need some additional care during our senior years.

In fact, 70 percent of individuals over age 65 will need some type of long-term care services during their lifetime, according to the National Clearinghouse for Long Term Care Information.

As you can imagine, long-term care is not cheap. According to the latest information by one of the most comprehensive and respected surveys in the industry, in 2010 the average annual cost for a semiprivate room in a nursing home was $74,825 and $83,585 for a private room. Those costs translate to an average of $205 per day for a semiprivate room and $229 per day for a private room. These numbers will continue to rise.

We can’t depend on Medicare; the odds are good that it will pay only a fraction of nursing home costs you incur. At most, it will help cover the costs for the first 100 days of skilled care. Before we become eligible for Medicaid, we may need to use up most of our own assets.

Most of us would rather deny that we will need long-term care, but denial is not the answer. Securing long-term care insurance is the best thing we can do to ease our minds and conserve our life savings. Furthermore, it’s a good idea to obtain a policy early (you can get a policy as young as age 18) because the annual premium payments are lower and it’s easier to qualify for a policy.

Long-term care insurance can pay the cost, should you need to spend some time in a nursing home. But possibly the most important benefit of long-term care insurance is that it may keep you out of a nursing home.

That’s right. A good long-term care policy not only pays the cost of a nursing home, it also covers the cost of other care, including nursing services, home health care, hospice, licensed therapy, adult day care and homemaker services.

These services can provide someone to make meals and do laundry; they can provide assistance with bathing, dressing and other daily personal care needs; they can provide physical therapy at home; and more.
By covering the cost of other services, long-term care insurance can eliminate or, at the very least, postpone the need for nursing home care.

You may also be able to use the benefits provided by a long-term care policy more than once. Let’s say you broke a bone, which required a short nursing home stay or eight weeks of in-home physical therapy. Once you have satisfied the elimination period, your long-term care policy will pay the cost of that short-term care, as well as care you may need in the future.

Long-term care insurance can help ease our minds, but it is important to understand that not all long-term care policies are alike.

Some cover the cost of only nursing home care and others cover both nursing home and in-home care. Some offer tax-free benefits while others provide premium discounts if policies are purchased for both a husband and wife. The better policies offer all of these options and more.

When looking for a long-term care policy, it’s important to do business with a financially secure organization. To find a policy that’s right for you, it’s important to consider all of the options, such as deductible period, daily benefits, maximum lifetime benefit and inflation protection.

Don’t wait until you need care and wish you had insurance to cover the cost. Contact your insurance agent to decide which long-term care policy is right for you.

Tim Hranka is a representative with COUNTRY Financial, 4200 W. Euclid Ave., in Rolling Meadows.

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