First, let’s define long-term care insurance. This is an insurance product that helps to cover the cost of long-term care without a pre-determined period of time. This type of insurance covers for expenses usually not covered by your health insurance, Medicare or Medicaid.

Without a doubt, one of the largest medical costs you’re likely to incur in your lifetime is long-term care.

For care outside of the home, a private room in a nursing home can cost over $75,000 a year. Long-term care insurance, while not cheap, can reduce that burden.

As with everything else, this type of insurance has its benefits and drawbacks. Have you considered long-term care insurance in your retirement planning? Increasing numbers of insurance companies are beginning to offer this product with a wide range of options, so you have many choices.

The biggest criticism of these policies has been their cost. However, this insurance can save you a tremendous amount of money in medical expenses.

Options to consider for Long-Term Insurance:

1. Daily benefit amount. This is the maximum amount the policy will pay per day for care. You can typically choose from $50/day to $500/day. Policies often specify a maximum monthly amount instead. This is nice because you can then opt to receive more care on some days and less on others.
2. Different amounts in different settings. Some policies will let you choose the different benefit amounts for different settings. Maybe you feel comfortable with $100/day at home but would rather have $150/day in a long-term care facility.
3. Maximum Lifetime Benefit. This is the maximum the policy will pay out over your lifetime. There are some policies with unlimited total benefits.
4. Comprehensive or facility care. Some insurance only covers care that you receive in a long-term care facility. Other policies are considered to be “comprehensive” and allow for a wider range of services. Most insurance sold today is comprehensive, but be sure to check before you sign on the dotted line.

• Facility care policies are still available for those who feel confident that their family and friends are willing and able to care for them at home.

1. Additional benefits: As with other types of insurance, there are many other options or “riders” that can be added to the basic coverage.

• Inflation Protection is a popular option. If you’re unlikely to need to care until far in the future, this is worth looking into. How much are health care costs going to rise in the next 25 years? Likely a lot. There are many types of Inflation Protection, so be sure of what you’re actually getting.

Here are some additional costs that long-term care insurance may or may not cover. Do your research!

• Modification of your home. This would include augmentations like ramps and grab bars.
• Transportation to doctor’s appointments.
• Training a relative or a friend to provide personal care properly.
• In-home medical equipment.

Some policies will even pay your friends or family members to provide care to you. These payouts tend to be rather small and may only cover the cost that the care provider actually incurs. While most policies will not provide payment under these circumstances, some offer cash payment for each day you’re in the care of a non-medical professional.

Long-term care insurance is something every person should seriously consider. The cost of the policy can be high, but the cost of not having a policy can be catastrophic. Even a 65 year-old millionaire can run out of money in a hurry should he require long-term care.

These policies tend to have more options and exceptions than other types of insurance, so be sure to really do your research or sit down with an insurance agent that you trust. However you go about your investigation, it’s never too late to start looking into long-term care insurance.

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