California Long Term Care Insurance
Maybe you remember in a long ago, bygone time when your grandmother was sent to live in a nursing home. Memories of visiting her might pop into your head. You never had to wonder about how her estate or your family paid for it and they probably never talked about it.
Nursing homes and the elderly are just the tip of the iceberg where long term care is concerned. The long term care costs average 12,000 to 16,000 dollars per year just for in-home care.
If you were to need at-home nursing care that figure jumps to 56,000 dollars per year. Skilled nursing care at a facility is approximately 22,000 dollars per year.
You may not have that kind of money to hand over every year. Perhaps if you were to need in-home care you would want your surviving wife or husband to keep the house if you were to pass away. That is where long term care insurance steps in to pay the way.
Take a look at this information to help you decide what is important in a policy. In the meantime, be sure to use our FREE comparison tool at the top of this page!
Is it only for the elderly?
Long term care insurance is more than just nursing home insurance. It jumps in to assist adults young and older to pay for at-home or in-facility care for terminal illness, stroke, hip replacement, Alzheimer's care, just to name a few. Basically, if an individual struggles with performing self care, technically known as activities of daily living (ADLs), then they may qualify to use their long term care insurance.
Here's an example. Let's say Stan is a 35-year-old engineer and father of two whose wife is a retail manager. He has a stroke and is diagnosed with an inoperable brain tumor at the hospital who only has six months to live. His workplace disability insurance pays a percentage of his old salary, but health insurance only covers medical care.
The hospital social worker and doctor determine that Stan will be unable to work because the stroke harmed his reasoning and math abilities. In addition, he requires special care as his brain continues to deteriorate.
He can no longer bathe or feed himself and requires physical therapy and IV medication administration daily. His brain tumor will cause him to go blind, be disoriented and a safety hazard to his family, the kids and their home. His wife cannot afford to stay home with him, because she needs to continue working and the skilled care he requires is outside her skill set.
The evaluation from the doctor reveals that Stan cannot perform a set number of ADLs, which is the main basis for long term care insurance to kick into gear. Long term care pays out in one of two ways. Some plans pay out a cash benefit, while most policies reimburse for charges.
Facts about LTC
- You are not too young to buy long term care coverage.
- Buy LTC insurance while you are young. It will cost a lot less.
- One year of care ranges from 12,000 to 56,000 dollars
- Once you become ill, it is too late to purchase long term care insurance.
Paying for Long Term care
People use a variety of methods to fund long term care:
- Medicare
- Medi-Cal
- Long term care insurance
- Personal financial resources.
The National Association of Insurance Commissioners provides an online consumer's guide of quick tips for buying long term care insurance. Long term care insurance differs from medical insurance in what it covers. Chronic and long-drawn, out illness or cognitive impairment caused by Alzheimer's or dementia require care beyond the medical establishment.
Long term care provides assistance with activities of daily living in environments including a hospice, at home, in a nursing home or an assisted living facility. Respite care and adult day care are two additional types of care. Though, adult day care, for instance, can be at home or at a community center.
Get more information at California Department of Insurance in its long term care buying guide.
What to Look for in LTC Insurance Companies
When you decide you can afford long term care insurance, do not have pre-existing conditions that would deny you coverage and want LTC, that's just the beginning of your journey. Once you put in for LTC quotes, you will have to evaluate the insurance companies who want to sell you a policy.
Ensure that there are no egregious consumer complaints against the insurance agency, especially not in the long term care arm. In addition, the reason you are buying coverage is just in case you need the money to cover long term care.
Part of your due diligence is ensuring the carrier is fiscally able to pay out claims. Make sure any insurance companies you are considering buying coverage from have the highest credit ratings, or greatest creditworthiness. Check on A.M. Best for the latest credit ratings.
Compare the quotes carefully before deciding on one plan over another policy. Read every policy thoroughly. You might be surprised at what is not included in some policies. For instance, some might include medical supplies, while other policies may not.
Supplies are often marked up and cost consumers a lot of money.
Other benefits to look for include cleaning, meal planning and preparation and laundry services. Those are all costs that quickly add up also. Before declining a long term care policy that include such services, weigh the policy cost against the payout of such benefits.
Look at the lifetime maximum of each policy. To understand this amount, factor how much the insurance policy will pay daily and multiply it by the number of days you would need the policy. It is estimated that long term care is called upon for an average of two to five years. Keep that in mind when working out your ideal lifetime maximum.
Be prepared for the unexpected by buying long term care insurance. It covers you where disability and medical leave holes in your coverage. Buy a policy while you are still healthy and hopefully younger, to make the most of favorable long term care insurance rates.
Be sure to compare policies using our FREE search tool below!