What will you do if you are unable to perform even the simplest daily living activities? Will you inconvenience your family and friends with the burden of caring for you? Will you be able to afford the high costs associated with elder care or assisted living? What about an alternative option that could mitigate the inconveniences to your family and friends as well as limit the financial impact that would result from high health care and living costs.
A long term care policy can protect against the risk of large out of pocket costs associated with long term health care needs and living expenses. Inpiduals when unable to perform the basic activities such as such as dressing, bathing, eating and toileting may benefit from long term care coverage. Many times referred to as LTC, this type of coverage provides nursing-home care, home-health care and personal or adult day care for inpiduals.
Like traditional insurance, the insured makes premium payments. Policyholders should be aware that premiums can increase over time but only when they are increased for an entire class of policyholders; this increase is not on an inpidual basis. Additionally, the insured elects a benefit period. This is the period of time that they will receive the benefits. Throughout the elected benefit period, they will receive either daily or monthly benefit payments to help fund their long term care costs.
An elimination period exists with LTC coverage. This is the number of days that the insured must pay for their own care. Once this period has elapsed, the benefit payments begin. The elimination period for LTC tends to range from 30 to 180 days.
Each LTC policy is unique to the insured’s specific circumstances and financial needs. Most LTC policies are reimbursement plans. This means that the insured pays their own bills and all eligible expenses are reimbursed by the insurance company. Although more expensive, indemnity plans exist where the full daily or monthly benefit amount is paid directly by the insurance company to the LTC provider.
There are many financial benefits associated with long term care insurance. A LTC policy can maintain one's financial independence from their family and friends. This type of coverage can also help protect one’s assets. Funding long term care costs through insurance coverage can alleviate the financial stress associated with high long term care costs. It can also reduce the need to dip into your assets.
With the rising costs in health care, long term care coverage can help to alleviate financial stress later on in life when you may need it most. This type of coverage can be essential to your overall financial planning strategy as it can mitigate the risk of this critical financial event. If you or a loved one are considering or believe long term care insurance is suitable for you, call us at (631) 952-4466 x12 and properly educate yourself on LTC. Also, be sure to check out the latest Mitlin Minute which talks more about LTC and its benefits.
Disclaimer: This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.