How will you pay for increasingly expensive care if you or a family member experience a chronic condition such as Alzheimer´s disease or dementia? The average nursing home stay in the United States is 2.1 years and costs approximately $170,163 according to The MetLife Market Survey of Nursing Home & Home Care Costs, October 2011. With the rising cost of care, long-term care insurance is becoming an increasingly important planning tool.
What Is Long-Term Care Insurance?
Long-term care insurance is an insurance policy that helps to pay for the care of chronic conditions. This insurance may cover the cost of services for nursing, diagnostic, preventive, therapeutic, and rehabilitative care. Policies are offered on an individual or a group basis.
How Much Does Long-Term Care Insurance Cost?
As with other types of insurance, premiums for long-term care insurance vary by the applicant´s age and health, the region, and the amount of coverage. A long-term care policy can cost from $1,000 to $15,000 per year or more. Since age is a factor, some advisors suggest purchasing a policy before reaching the age of 60 or 65. Keep in mind that Oregon law allows the insurer to go back 10 years in the applicant´s health history.
Who Needs Long-Term Care Insurance?
Long-term care expenses can easily cost $4,000 - $7,000 or more per month. Financial planning experts advise that people in the middle-economic brackets will benefit the most from long-term care insurance. People with little or no savings may find the insurance premiums too expensive; if they need long-term care, they will likely spend their assets to qualify for Medicaid. People with very large estates and high incomes will generally be able to afford the monthly cost of long-term care without insurance. However, those in the middle-economic brackets have too many assets to qualify for Medicaid and too few assets to pay for long-term care. Long-term care insurance can serve to protect the estates of middle-income families and help to pay for necessary care and services.
Other Helpful Links:
- Consumer Guide to Long Term Care Insurance in Oregon. Oregon Insurance Division
- Health Insurance Association of America, Guide to Long-Term Care Insurance:
- National Association of Insurance Commissioners, Understanding Long-Term Care Insurance