Long Term Care Insurance

More and more Americans are realizing the benefit of purchasing long-term care insurance, partly because the oldest Baby Boomers are now in their 50's and caring for elderly parents while also planning for their own retirement.

The number of people buying long-term care insurance nationally is growing by 20% a year, says Winthrop Cashdollar, Director of the Center for Disability and Long-Term Care Insurance at the Health Insurance Association of America, in Washington). Although more policies are being sold, the percentage of the population holding long-term care insurance is small. Less then 10 percent of the nation's senior citizens have insurance.

People shy away from buying it, mainly because it is expensive, they might not use it, and they feel overwhelmed trying to choose a wide variety of coverage options. Many people also believe that the government sponsored health programs, Medicare and Medicaid will cover their expenses. But Medicare does not cover many types of long-term care, and both programs have strict guidelines regarding what is covered and how to qualify for funds. If you overestimate Medicare, then you underestimate your financial risk. Buying long-term care insurance provides "a predictable cost of a non-predictable risk.

Nursing home care costs an average of $50,000 a year. Roughly one of five Baby Boomers will need nursing home care at some point in their lives. This care typically entails help with daily living activities such as bathing, getting dressed and eating.  Occupancy in nursing homes is likely to rise due to changes in the health care system that quickly move people from hospitals into nursing homes, then to home health care.

People are beginning to realize public programs - Medicare and Medicaid - aren't going to cover them and they must take personal responsibility. The growing number of policies sold and the drop in the average age of enrollees can be attributed in large part to the increasing number of employers offering long-term care insurance. As of 1999, more then 3,000 employers offered long-term health care insurance to employees. The federal government announced in December 2001, that it would offer long-term health care insurance to its employees, the military, retirees and their families. This move will likely encourage even more employers to add long-term care to their benefit programs.

Further, a more stable workforce is maintained because people caring for the disabled elders are better able to keep working rather then than having to quit to care for a disabled elder. Long-term care insurance also is attractive to people who want to choose the type of care they receive. The insurance covers a range of options, including nursing homes, assisted living facilities and hospice, home and community based care. People who are concerned about being in a nursing facility versus someplace else, should be aware that long-term care insurance could give you a choice of where you want to be. Also, the type of coverage and care offered by Medicare and Medicaid can change, while an insurance policy is stable.

Key Benefits

• Protection: Protects Individuals and families from the potentially devastating cost of Long-Term Care.
• Guaranteed Renewable: Insured has the right to continue coverage in force as long as the premiums are paid on time.
• Waiver of Premium: Allows the insured to stop paying during the time one is receiving benefits.