Many of us are preparing financially for when we retire.  You have been saving up and even opened an Individual Retirement Account (IRA) to keep track of your finances.  But what if you become ill later in life and need assistance with everyday activities such as feeding or walking?  This is known as long-term care where a range of services are provided to you to meet your personal care needs.  We tend to overlook long-term care because we know our family will be there to take care of us.  But how will they take care of you if they have to work?  Or better yet who will help pay for long-term care?

It may be hard to imagine needing help to care for yourself later on in life.  According to the U.S Department of Health and Human Services among 65-year olds, 70% will need some form of long-term care.  Your regular health insurance does not cover long-term care.  Medicare will only cover short stays in a nursing home or limited home health care.  So it will fall on you and your family to provide for these services.

How Long-term Insurance Works:

  • Your insurance rate will vary from others based on your age, health, gender and marital status.
  • Coverage is approved after an application is completed and an interview is scheduled to review health information.
  • Most long-term care policies will disburse benefits if insured is unable to complete at least two daily activities on their own.  These daily activities include bathing, dressing and/or eating.
  • You may have to make out-of-pocket payments for a time period before insurer starts reimbursing you for any care.  This is called an elimination period that can range from 30 to 90 days.
  • Once your policy is issued you will begin making payments.  In the event that a claim is filed for care the insurance company will request medical records from your doctor.

Type of Long-term Care Facilities:

  • Nursing homes take care of patients who need medical attention 24 hours a day.
  • Assisted living facilities help residents with daily living activities and medical care that do not require assistance 24 hours a day.
  • Adult day care centers will care for the elderly during the day but are sent home in the evening.
  • Residential Care Facility for the Elderly (RCFE) are licensed homes in residential neighborhoods with staff caring for up to six senior citizens.
  • Other institutions offer combined features that can change from assisted-living to a nursing home depending on the residents’ health.

Most families start with low-cost alternatives then transition to facilities when their loved ones health begins to deteriorate.  You should research all long-term care options while weighing in the pros and cons of each.

  • A low-cost alternative to helping care for your elderly family member can came from friends or family.  This option can be costly if someone in the family has to quit their job.  Assistance from friends or family may be for only a few hours in the day.
  • Home health care centers can send you personal care assistants and offer you help as you need it.
  • You can hire a live-in caregiver to assist you with your elderly family member while you have to work.