Long-Term and Short-Term Care Insurance
How Will You Pay For Skilled Care If You Need It?
The cost of paying for long-term care has been rising and the average cost of a nursing home stay is now over $70,000 per year in the US. While Medicare pays for some limited skilled nursing care following a hospitalization, it does not pay for long-term care and support services if you only require custodial care (which is the majority of people using these services). Nearly 70% of adults that are 65 and older will require some type of skilled nursing care service in their lifetime.1
Some people may be able to self-finance their nursing care needs or have family that can provide it, but both of these options add a significant financial burden to either the caregivers or the people requiring the care. There are many options available to help cover these costs when Medicare will not and the younger you are when you consider and purchase these options, the more affordable they may be.
The first option is traditional long-term care insurance which can include a number of features depending on your needs. Some policies will offer a return of premium (less claims paid) if purchased before your 65th birthday. You may also elect to have coverage for assisted living facilities or money to pay for care in your own home. These policies often have a household discount if both spouses get coverage.
These types of policies provide the greatest level of protection against the cost of nursing care often providing coverage several years if it is needed.
Short-Term Care insurance (also known as Recovery Care insurance) is offered as a lower cost alternative to traditional Long-Term Care coverage. These policies generally have a maximum benefit period of 360 days and can offer a cash benefit paid to the policyholder to help cover the cost of a shorter nursing home stay. Some policies will pay the same benefit for a stay in an assisted living facility and may offer an option to receive a weekly benefit to pay for in-home assistance. While the benefit period may be shorter, these policies frequently offer a policy reset feature that allows you to draw benefits for an additional period of care that is up to the number of days originally purchased. The reset generally occurs after a 180-day period during which no care was required. While it does not provide the same extended coverage of traditional long-term care insurance, the lower cost combined with the policy reset feature make it an attractive alternative to long-term care policies that some may feel aren’t within their budget.
A More Personalized Approach
Deciding how to pay for nursing care isn't an easy conversation to have with your family or your spouse. No one wants to think about the idea of spending some of their golden years in a nursing home, but the financial strain the cost of these institutions can have on your retirement savings make it an important conversation to have. Before deciding anything, let's have a conversation to review your options.
I can meet in-person, via the phone, or even via video-conference with my laptop and your internet-connected computer, smartphone or tablet. Simply fill out the form below and I'll be in touch shortly to schedule a time to review your needs, answer your questions, and hopefully make this all seem easier to understand. Or if you prefer, you can call me directly at 309-696-7933.