As the changing demographics of the United States (and the world) indicate, the population is getting older. Statistically, that may sound daunting. However, what it really means is that people are living longer, and living longer means more time to enjoy life and time with your loved ones. As you age, though, chances are that, at some point, you may experience a health event that could significantly impact your daily life.
In the healthcare and insurance realms, such health changes are viewed in terms of their impact on six activities of daily living (ADLs):
If there is an inability to complete two of these activities on your own, then you may require long-term care (LTC). Requiring LTC can be a significant financial event and greatly impact your savings, cash flow and the finances of your extended family. Read on to learn about the ways to prepare for the possibility of long-term care.
Long-Term Care Insurance
What can you do to prepare for the possibility of long-term care? There are generally three scenarios for covering LTC costs:
•You are financially able to pay for your ongoing care
•Long-term care insurance (LTCI) coverage
•Medicaid, if you meet the financial requirements (usually impoverishment)
For most people, being financially responsible for the $55,000 – $150,000 annual cost per person is not realistic. On the other end of the spectrum, Medicaid requires you to have no more than $2,000 in assets (slightly more if married) in order to qualify. Thus, long-term care insurance is the answer for many. However, some people have never heard of the insurance or hope that they'll never need it -- until it is too late. You cannot purchase LTCI if the person needing the coverage is already requiring such care (i.e., the coverage does not offer coverage going forward for pre-existing illness).
Who Should Purchase LTCI?
LTCI is not just for the elderly. Anyone from 18 years old and older should consider this coverage. Definitely, by age 55, you should be well versed with this coverage and looking to enter into a policy, and by age 65, you should have a policy in place. Premiums are reasonable and are far less than the financial burden that you can experience without coverage.
What Types of Coverage Are Available?
LTCI policies are of two types, traditional and hybrids. Traditional policies have been around the longest, but they are not always the most favored (either by the policyholders or the institutions providing care). Traditional policies collect a premium and never return anything to the policyholder if not used. The hybrids are more flexible than the traditional policies and can return premiums back to policyholders or designated beneficiaries. Hybrids are the more frequently used policies nowadays.
How to Obtain Coverage
The key to selecting the right coverage is having a good and trusted insurance agent who can guide you through this process and explain your options.
In Jacksonville, FL, the Della Porta Group is an insurance agency trusted for helping people navigate this process.