Long Term Healthcare

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Photo: Sri Maiava Rusden

Do your homework. Cunningham recom-mends that people thoroughly research long-term-care insurance and meet with several insurance companies, and attend local long-term-care presentations.

The next step is meeting with an insurance agent, one you trust and with whom you feel comfortable discussing healthcare options. After all, long-term-care is more than healthcare; it can be very personal—it pays for such intimate things as care workers who might bath, feed and dress you. You’re planning to protect not only your health, but also your dignity.

“You have to look at your own personal circumstances and ask, ‘Where do I want to spend my last days? Can I afford long-term-care­—because not everyone can—and when is the best time to get it?’” says Cunningham.

People in their 40s and 50s are going to get the best advantage from long-term health policies because they are likely to be more healthy and still working. The earlier you buy a policy, the lower the annual or monthly costs will be.

“The longer you wait, the greater the risk that you’re going to encounter a health condition that’s going to prevent you from being able to be insured,” adds Byers. You are less likely to have chronic ailments at a younger age, which can prevent you from being insured, so it’s best to have a policy in place before you reach 60. “You have to get long-term-care insurance before you actually show that you have a medical problem,” says Stanton.

Both Cunningham and Byers stress that long-term-care insurance should only be purchased if your finances can adequately and continually support it.

Tip: Look for policies that offer inflation protection.

Purchasing long-term-care insurance requires thousands of dollars—possibly over decades, even if you transition to a fixed income—but if you stop paying, you not only lose your coverage, you could lose everything you’ve invested. For example, a healthy 56-year-old man with decent coverage can expect to pay roughly $2,000 a year in insurance premiums, or $180 a month. A healthy 49-year-old woman will pay more than $1,800 in annual premiums, or $160 a month. 

You get to decide whether to pay your premiums monthly, quarterly, semiannually or annually. Choose a payment schedule in accor-dance with the rest of your budget costs.

Braun also warns that if you cannot afford a comprehensive policy, don’t purchase one at all. It’s better to forgo purchasing a policy rather than having to whittle it down to save money. “Read the fine print and look closely at what your policy will and will not cover,” says Braun. “It may or may not help you.”

In addition to well-established finances, you also have to meti-culously define what your long-term-care policy will include. This is where a crystal ball would come in handy, because you have to clairvoyantly decide the type of care you think you’ll need, and how it will be administered. A well-crafted policy will cover comprehensive care either in your home (including nurses, care workers and other community services) or in an assisted-living facility or nursing home (including care services plus room and board). However, your long-term-care policy will not cover drug or alcohol abuse, or self-inflicted or war injuries.

Long-term-care insurance is different from health insurance because there is no blanket coverage; you receive only the care that you contractually decided upon.

For example, if you buy a policy that specifies home care assistance and in the end you need around-the-clock care provided in a nursing-home facility, you would have to pay the difference in cost out of pocket. 

How long will your policy last? That is another question you have to answer; you can purchase coverage for a set number of years, or, if you can afford to do so, for a lifetime. Some policy benefits work in terms of the years of coverage you specify, while others determine the length of the benefit coverage in a total dollar amount. But remember, the longer and more extensive the policy, the higher the premiums.

Despite the complexity, purchasing a long-term-care insurance policy allows you to decide your long-term-care future, especially “if you value choice at all in your life,” says Stanton.

 “Long-term-care insurance is like a menu, because you can pick and choose what’s going to work best for you,” adds Cunningham.