Long Term Care Overview

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Preparing for Long Term Care (LTC) needs may be one of the most important plans you ever make!

What are long term care needs?

The National Clearinghouse for LTC describes it as "a range of services and supports you may need to meet your health or personal needs over a long period of time. Most long–term care is not medical care, but rather assistance with the basic personal tasks of everyday life."

How are these needs paid for?

There are four basic avenues for providing long term care needs (1) informal care by a friend or family member, (2) paying for long term care services from life savings, (3) having the government pay for long term care needs, and (4) paying for services through an insurance policy.

An exhaustive list of means of payment for services can be found at Medicare.gov.

While this topic may seem overwhelming, you will build a basic understanding here in a few short minutes. The importance of these policies has grown due to three factors.

  • Independence
    • Have you ever nursed a friend or relative back to health or been provided that same care and attention? This can be a challenge even when their condition is improving – but what if it was not improving? What if every day, basic activities like dressing, eating, transferring, toileting, and hygiene must be performed? 70% of us aged 65 and above will need assistance with these basic activities according to the US Department of Health & Human Services*.
      *National Clearinghouse for Long Term Care Information, September 2008
    • Because of these facts, and the reality of burdening our loved ones with our care, that every day consumers review how they will pay for such care. How would you pay for such care?
  • Paying for Care
    • The four options to pay for care are (1) Pay for it out of pocket (2) Use Private Insurance (3) Have a family member provide or pay for care or (4) Have the government provide care.
    • Important to consider is that one year of care today can cost $75,000 (American Association for Long Term Care Insurance). With a 4.1% inflation rate, in 30 years that cost will balloon to $250,000.
  • Flexibility
    • Policies today have a myriad of options that will give you more choices should you need care while also maintaining a more manageable monthly premium.

For these reasons and more over 8 million Americans are protected by Long Term Care insurance (American Association for Long–Term Care Insurance, 2008 LTCi Sourcebook).