Concerned seniors worry about paying for day-to-day expenses if they become unable to care for themselves due to chronic illnesses, disabilities or other conditions. According to longtermcare.gov, about 70 percent of individuals over age 65 will require at least some type of long-term care services during their lifetime. They want to be able to receive quality care, live in a pleasant environment and not burden their loved ones. Many Americans fall into the income bracket that does not allow them to fund their long term stay in assisted living, memory or nursing care on their own but they have too many assets to qualify for Medicare/Medicaid. This is when long-term care insurance steps in to fill the gaps.
1. What is long-term care insurance?
Long-Term Care (LTC) insurance is optional after-tax insurance coverage with benefits that help pay for many of the day-to-day expenses encountered with assisted living, Alzheimer’s and nursing home care that are not normally covered by Medicare, Medicaid, medical or disability plans. In the United States there are two types of long-term care policies available: tax qualified and non-tax qualified.
- Tax qualified policies are the most common. They require that the person will need care for at least 90 days and are unable to perform 2 or more activities of daily living (eating, dressing, bathing, transferring, toileting/continence) without substantial assistance (hands on or standby). A doctor must provide a plan of care. Benefits from this type of plan are non-taxable.
- Non-tax qualified policies are often implemented when a medical necessity triggers the need for long-term care. These policies will usually only require the need for assistance with one or more of the six activities of daily living to receive benefits. It has yet to be determined if these benefits are taxable.
2. What are the advantages of long-term care benefits?
- Independance
The last thing many senior loved ones want is to be a burden on their family members. One way to relieve that stress and give Mom or Dad and the kids peace of mind is procuring long-term care insurance. It helps cover what would normally be out of pocket expenses. In families without long-term care insurance coverage, the savings of the senior loved one and children alike may be depleted.
- Tax Liability
Although it varies by state, premiums paid for long-term care coverage may be eligible for income tax deductions and benefits that are paid by the long-term care contract are usually excluded from income figures.
3. When would Mom or Dad need long-term care?
If Mom or Dad don’t feel secure and safe in their own home, or when they are not able to perform tasks that are necessary for independent living it may be time for long-term care. They may not need round-the-clock nursing care, and might choose to live in an assisted living community. Assisted living residents typically live in their own apartments while enjoying services like meals, exercise, social gatherings, activities and transportation along with long-term care services. Long-term care may be needed when seniors can no longer perform basic tasks like such as:
- Dressing
- Bathing
- Using the toilet
- Transferring or moving (to or from bed or chair)
- Incontinence Issues
- Eating
4. When should you purchase long-term care insurance?
Like anything else that reminds us that we are getting old, purchasing long-term care insurance is not on the top of any young couple’s to-do list. But as we age, and our parents age, the advantages of having an insurance policy in place that will help offset the costs of an assisted living or memory care community becomes more and more apparent. As with any other insurance policy, the younger you are when you start paying the premiums, the lower they will be and the more benefits you will receive down the line when it comes time to use those benefits. A review of your portfolio with your financial planner and frank discussions with loved ones will help you determine the best time for your family. Most insurers recommend from 45 to 55 as the best window of time. The longer you wait to begin, the more it will cost you and the lower your eventual benefits will be.
Are you wondering if long term benefits may help with your current situation? Contact Senior Solutions, we can arrange a tour of one of our twelve Tennessee and Georgia assisted living and memory care communities.
