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Long-Term Care

You can never know for sure if you will need long-term care. Maybe you will never need it. But an unexpected accident, illness, or injury can change your needs, sometimes suddenly. The best time to think about long-term care is before you need it.

Planning for the possibility of long-term care gives you time to learn about services in your community and what they cost. It also allows you to make important decisions while you are still able.

People with Alzheimer’s disease or other cognitive impairment should begin planning for long-term care as soon as possible.

Making Financial Decisions for Long-Term CareWhat Is Long-Term Care?

Long-term care can be expensive. Americans spend billions of dollars a year on various services. How people pay for long-term care depends on their financial situation and the kinds of services they use. Often, they rely on a variety of payment sources, including:

  • Personal funds, including pensions, savings, and income from stocks
  • Government health insurance programs, such as Medicaid (Medicare does not cover long-term care but may cover some costs of short-term care in a nursing home after a hospital stay.)
  • Private financing options, such as long-term care insurance
  • Veterans’ benefits
  • Services through the Older Americans Act

Do you have a gap in your strategy?

How Asset Care can be used in retirement and long-term care planning

How does the federal long-term care insurance differ from other long-term care policies?

The federal long-term care policy falls under the Traditional LTCi category. Traditional LTC pays a benefit when the insured cannot perform 2 out of 6 activities of daily living.

Traditional, standalone long-term care policies offer coverage only for long-term care in your home or in a specialized facility. There is no cash value in traditional LTC policies, therefore nothing goes to a beneficiary from your LTC policy upon your death. However, there may be joint options available where two spouses may share the same pool of money.

Traditional LTC are still popular, but in recent years long-term care has an innovative new choice. Hybrid policies, sometimes called combo or linked-benefit products, bundle long-term care insurance with either life insurance or an annuity.

That means if you need long-term care, the policy covers your expenses, but if you don’t need it, you’ve got other options. Depending on the type of hybrid policy you select, it will either pay your loved ones a death benefit, like a life insurance policy, or it guarantees you an income stream during retirement, like an annuity.

Can I be turned down for LTC?

The short answer is yes, regardless of the company and policy you apply for. All long-term care policies are medically underwritten and there is a possibility that you may not qualify for coverage.

We recommend filling out a confidential medical history form so we can call the underwriters who can help narrow down your best option.

What are my options if I am uninsurable or can’t afford the premiums?

Your only other option is to self-insure and pay for future LTC expenses out of pocket. Self-insuring for LTC can be tricky and is an area in which you should work with a professional. Market risk, safety, taxes, liquidity and inflation must all be considered when planning for LTC expenses.

For More Information About Long-Term Care

Eldercare Locator
1-800-677-1116 (toll-free)

National Association of Area Agencies on Aging

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