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"I'm too young to need Long Term Care Insurance."

A lot of us think that only senior citizens need to worry about Long Term Care, so we put off preparing for the possibility. Unfortunately, untimely accidents or illnesses can strike at any age. Forty percent of the 12 million Americans receiving Long Term Care are under age 65. (1) The truth is people of any age can develop serious conditions that require assistance with routine daily activities.

Further, Long Term Care insurance premiums are based on your age at the time you apply for coverage, so the premium you would pay goes up with each birthday. Studies show that a Long Term Care policy costs almost twice as much when purchased at age 70 than it would have at age 60. (2)

Once you’ve purchased Long Term Care insurance, the insurer can only raise your premium on a class basis — not because of your age or health.

Another fact to remember is that you must be healthy to be eligible for Long Term Care insurance. Once your health begins to deteriorate or you suffer a debilitating accident, you may no longer be able to qualify for coverage.

1. US Department of Health and Human Services National Clearinghouse for Long Term Care Information, October 2008.

2. Kaiser Commission on Medicaid and the Uninsured - "Closing the Long Term Care Funding Gap, June 2009.

"If I live a long time, I may need Long Term Care services."

The truth is today's medical advances make it very likely that you will survive well into your 80s. The longer you live, the more likely you will need Long Term Care services.

Consider this: there is a 1-in-1200 risk of having a fire that will cause major damage to your home. A 1-in-240 risk of having an accident that will destroy your car. Compare those statistics to the 1-in-2 risk that the average person will need some form of Long Term Care in their lifetime. (3)

Ironically, most people insure their cars and their homes, but not the cost of a nursing home stay — the risk that’s most likely to occur.

3. Daily Finance, July 2011.

"My family will take care of me."

This might have been a reasonable assumption years ago when grown children often lived near their parents and women stayed at home. In today's society, children may live across the country or around the globe.  And many women are active in the workforce with less time to fulfill their traditional caregiver role.

"I already have major medical and disability insurance. I don't need Long Term Care insurance."

Long Term Care is rarely covered by health insurance plans, and disability insurance is to replace your salary. It doesn't provided additional benefits for Long Term Care services.

"Medicare and Medicaid will cover my bills."

Medicare is generally available for those who are disabled and for people over age 65, but it only pays limited amounts for Long Term Care services and only if you meet Medicare's conditions for payment.

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Medicare Payment For Skilled Nursing Home Care

Time Period

Medicare Pays

You Pay

Day 1-201

100% of covered service

Only for non-covered service

Day 21-1001

All covered services after co-payment

$152/day (2014) copay plus any non-covered service

Day 101+

$0

100%

1Must meet Medicare's conditions for payment Source: www.medicare.gov

Medicaid is the government program to help those in financial need.  It won't kick in until virtually all of your assets have been consumed.

"I can save enough on my own."

The chart below shows how much self-insuring could cost you.

National HC Cost Per Day
Age Today At Age 80 Cost of Care Monthly Savings Needed
50 $193.00 $834.00 $913,378.00 $961.00
55 $193.00 $654.00 $715,655.00 $1,087.00
60 $193.00 $512.00 $560,735.00 $1,270.00
65 $193.00 $401.00 $439,350.00 $1,573.00
70 $193.00 $314.00 $344,242.00 $2,176.00

* Assuming five percent inflation.
** For an average three-year stay in a nursing home at age 80.
*** Assuming six percent returns.

"Long Term Care insurance is nursing home insurance. I don’t think I’ll ever go there."

No one ever wants to go to a nursing home, but at some point in your life it could become necessary. Don’t confuse nursing home care with the need for Long Term Care assistance. Most Long Term Care is provided in settings other than a nursing home. Today’s best Long Term Care policies cover all key care giving needs and settings.

"Long Term Care insurance is too expensive."

Long Term Care insurance is often more affordable than people think. Premiums are based on your age at the time you apply for coverage, so the younger you are when you get the protection, the more affordable it can be. Further, just one year in a nursing home is often more expensive than 20 or 30 years of Long Term Care insurance premiums.

 

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