How Is Long-term Care Insurance Useful?
Most individuals that are nearing their age of retirement start thinking of ways to safeguard their savings. Once you retire, the income stops coming in, you've got to be dependent on your savings, and investments you've made. Research reveals that more than 60% of individuals that are above the age of 65 require some type of assistance, care, and support during their lifetime. Individuals may not be sick or ill in the literal sense but may not be able to carry out their basic day-to-day activities on their own. Individuals unable to perform their daily activities such as eating meals, going to the toilet, walking, having a bath, dressing up, or getting out of a bed or a chair need assistance with these activities. The amount spent on availing the services of a caregiver, nurse, housekeeper, or therapist for assistance and care can be exceedingly high and empty an individual's savings. With a long-term care insurance policy the expense that arises on long term care of the individual will be borne by the insurance company.
Long-term care insurance provides cover on
- Hospice Care
- Home Care
- Respite Care
- Daycare for Adults
- Alzheimer's assistance
- Assisted living
The benefits of the policy are in accordance with the type of policy you avail. A maximum limit policy on long-term care insurance will bear the expenses of different services availed 24 hours a day, each day of the week. Individuals can avail of individual policies or group policies. Individual policies are preferred as they offer more benefits. The deductible charged on group policies in most cases is high, along with few benefits. An individual with a long-term care insurance policy is eligible for the benefits of the policy in the event that she/he has a cognitive impairment or needs care due to inability of performing (ADLs) activities of daily living. The rates on long term insurance care are determined by the duration of the benefits, the age of the individual, elimination period, and inflation protection. Policies have an elimination period which may be between 0-90 days. The elimination period is the time during which the individual makes payment for the care or assistance provided before receiving the benefits from the insurance company. Individuals that make claims on the policy may be required to maintain proof of service availed and the number of days paid care was used.
Some organizations or firms may provide their employees with a long-term care insurance policy. Individuals can avail of two types of long-term care insurance policies, tax qualified policies, and non-tax qualified policies. It is recommended that individuals review the pros and cons that apply to both these policies. As benefits are not taxable, people prefer tax qualified policies. Although most rates that offer long term care insurance do not vary drastically, make sure you compare rates to avail of a good offer. Make sure you know about the benefits offered on different policies by different insurance companies before you purchase long-term care insurance. The reason you need to determine what's going to work for you is because policies function on different terms so it's not a great idea to be casual, and pick the first option that comes your way.