The average life expectancy of an American has almost doubled in the last century. While living longer is certainly something we can all be thankful for, we must also live with the effects of the natural aging process for longer than our ancestors did as a result. That means we all stand a much better chance of needing long-term care (LTC) at some point before the end of our lives. If you (or a spouse) do end up in LTC, how will you pay for the high cost of that care? Long-term care insurance is one option; however, you should understand what benefits you are getting before agreeing to purchase a policy. To help make sure you know what to look for when evaluating a policy, the Los Angeles elder law attorneys at Schomer Law Group, APC provide an overview of long-term care insurance.
Why Would I Need LTC Insurance?
When you enter your retirement years you will already stand a 50-50 chance of one day needing LTC. With each passing year, those odds increase. The cost of that care could deplete your retirement nest egg rapidly if you are forced to pay out of pocket. Nationwide, the average cost of a year in LTC was over $100,000 for 2021 and the average length of stay was three years. As you may well imagine, the average cost in California is higher than the national average. While Medicare will cover most of your health care expenses during your retirement years, it will not pay for LTC, nor will most basic health insurance policies. That leaves paying out of pocket, qualifying for Medicaid, or relying on long-term care insurance as your only options.
Is Long-Term Care Insurance Worth the Cost?
As the name implies, LTC insurance is health insurance that specifically covers expenses related to care in a long-term care facility, or other similar expenses. The cost of a LTC policy will vary widely, depending on several factors, including:
- Your age at the time of purchase
- Your general health at the time of purchase
- The state you live in
- The benefits included in the policy
When evaluating a LTC policy, the first thing you need to be clear on is what the policy covers and what it does not cover. For example, a LTC insurance policy may cover any, or all, of the following:
- Nursing home care
- Home health care
- Respite care
- Hospice care
- Personal care in your home
- Services in assisted living facilities
- Services in adult day care centers
- Services in other community facilities
Your LTC policy will likely not cover the following:
- A mental or nervous disorder or disease, other than Alzheimer’s disease or other dementia.
- Alcohol or drug addiction.
- Illness or injury caused by an act of war.
- Treatment in a government facility or that the government has already paid for.
- Attempted suicide or intentionally self-inflicted injuries.
- Care or services outside of the United States
Along with understanding what the policy does, and does not, cover, you need to be sure you understand things such as:
- How long is the “waiting period” before the policy will start providing benefits?
- How long will the policy pay out benefits?
- Is there a maximum benefit amount?
- What type of documentation is required before the policy will cover expenses?
- Does the policy have an automatic termination age/date or will it remain in effect until your death?
Contact a Los Angeles Elder Law Attorney
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about elder law issues, contact an experienced Los Angeles elder law attorney at Schomer Law Group APCby calling (310) 337-7696 to schedule an appointment.