Nursing homes are expensive. Stay at home care is expensive. Be smart and plan ahead.

In the current economy it is important to look at long term solutions. The future is arriving fast and it is important to be prepared for all contingencies. The unfortunate truth is that age catches up with everyone sooner or later. As you or a loved one advances in their life cycle, it is critical to consider the impacts on yourself and your family. This is where planning ahead becomes a vital part of your future security.

Should you find that yourself, or a family member is approaching the age of retirement, it is time to start thinking about contingency plans. The truth is that the cost of care for an elderly person is typically $40,000 to $60,000 a year, and the price is continually rising. In some cases the expenses can be significantly greater than that amount.

Expenditure at this level can very quickly surpass the income and savings level of most people. By having a policy you can protect those that are important to you from sudden financial catastrophe, and have a contingency plan in place that will fit your specific needs.

Many families will opt for stay at home care. In many cases the elderly person will require the full time assistance of a family member, spouse or professional care-giver. Often this will prevent the full time care giver from effectively having other employment, which can alter the families overall financial situation. The right policy can go far in offsetting or eliminating these costs.

Disability Insurance

The natural course of aging frequently makes life more challenging. Ltc insurance is a unique form of disability insurance that is designed to deal with age related health issues. Whether it is a simple loss of mobility or the onset of alzheimers, a well chosen term policy can provide the resources to provide for care, comfort and treatement.

Health Insurance

The issue of health insurance is one that everyone should be concerned with. An LTC plan provides for alzheimers care and the day to day necessities of anyone coping with long term health care issues. Financially this frees resources for treatment of medical conditions which might otherwise put a person in the very difficult dilemna of dealing with their immediate needs and longer term issues. You should contact a long term care insurance sales person to learn more about how this can specifically help your family's situation.

How do you protect yourself?

This is where long term health care insurance can make a huge difference in your life. Having a policy in place provides security for the elderly individual and spares the children or the spouse from having financial obligations that in many cases may be out of reach, regardless of their intentions. For those that do not wish to burden their families, and for those who are without people in their lives that are capable of assisting them as they grow elderly, a long term health care plan is something that is a necessity. By purchasing this form of insurance, you have the peace of mind and financial protection that you need.

What are the chances of needing prolonged care?

About 80% of people will require some form of prolonged care during their lives. Aging is a fact of life. Preperation gives you the freedom to spend your final years with the honor and dignity. It is wiser to have a plan in place than to leave family matters to chance.

Will the policy be cancelled when it is most needed?

NO.

Once a person buys a policy of this type, regulations forbid the insurance company from changing the terms or cancelling due to changes in the insurees health. Most policies are guaranteed to be renewable for life. The only way out for the insurance company is in the event of non-payment of the policy, so it is important to keep your payments current.

Is it cost effective?

Long term care insurance will typically cover about $200/day. It is far better to pay a reasonably low premium over a period of time, than to suddenly get hit with expenses of $6000/month when you can least afford it. In many cases the premiums are eligible for an income tax deduction.

What are the factors in determining the rates?

1. The insured persons age

2. The waiting period before the policy can be excercised. Some policies can be immediately implemented, most require a waiting period of up to a year before before payments can begin.

3. The current health rating of the applicant. Due to the nature of the policy, it is obviously smarter and more cost effective to purchase this type of premium before the more severe effects of aging become a factor

4. The benefits payment period. Policies vary in length. A policy which covers an anticipated ten year period of care will obviously be priced different than one which covers a forty year stay in a nursing facility.

5. Inflation protection. The buying power of money changes over time, protection against inflationary pressures is a very important consideration in any policy.

6. The amount of the daily benefit. The more that is covered on a per day basis, the greater the policies expense. This figure is important to consider, as greater coverage will likely affect the comfort of the person excersising the policy and the choice of facilities that fit within the price range. A higher ceiling allows a greater opportunity in selecting the ideal care facility.

What does long-term care insurance typically cover?

In most cases, long term care will cover the following

1. home care

2. adult daycare

3. assisted living

4. hospice care

5. alzheimers care facilities

6. nursing homes

7. respite care

Policies which cover in home care will typically cover expenses involving:

1. caregivers

2. housekeepers

3. therapists

4. private nurses

The flexibility of this type of policy allows the individual to choose the care giving situation that best fits their lifestyle and personal needs. Generally speaking any benefits from an LTC policy are tax free.

Choosing the right policy

1. Determine if the policy has limitations on the scope of the benefits. In many cases benefits will only be applied if care takes place in a facily.

2. Investigate policy options to see which fits your budget, necessary waiting period, and other considerations discussed above.

3. Determine if their are premium caps on the policy. Policies in some jurisdictions, such as Canada, may have a guaranteed cap on cost for a limited period (typically 5 years).

4. Evaluate options such as return of premium, which will allow a beneficiary to be assigned in case the main policy holder passes away.

5. As with any purchase, due dilligence is a good idea. Read the policy and make sure you understand what you are purchasing before entering into any contract.

Specific policies vary considerably by insurer and state or country of issue. Different regulations may make significant differences in policy terms and scope. Policies in different countries have very different rules and it is a good idea to be come familiar with the specifics of your policy. Information presented here is intended as a general guide and may or may not apply to the specific policy, provider or jurisdiction that you select.

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