Long-term care is what you'll need if you are unable to perform your normal daily activities on your own - such as eating, bathing, and dressing. If this happens, you may need additional help for an extended period of time, or even for the remainder of your life.
In fact, about 70 percent of people turning age 65 can expect to use some form of long-term care during their lives.1 And although it's typically associated with health care for the elderly, many times younger, working-age adults require long-term care due to a chronic illness or injury.
Whether it's provided in your home, at an assisted living or nursing facility, long-term care is typically very expensive and isn't covered by health or disability insurance, or even Medicare. So while your health insurance plan may cover nursing home expenses, it's generally only for a short time, such as when you are recovering from an illness or injury. With disability income insurance, you may receive compensation for a portion of your income (if you are unable to work), but not for long-term care. Medicare provides a very limited coverage for skilled nursing care following a hospitalization, but after that, it's up to you.
Considerations for long-term care insurance
If you find yourself in any of the above situations, you might be wondering just who pays the medical bills. In this case, you have the option of paying for costs out-of-pocket, using Medicaid, or long-term care insurance. However, Medicaid provides a very limited option for most people because not everyone qualifies, and not every health care facility will accept Medicaid coverage.
For these reasons, long-term care insurance can be a good option, especially if you have assets and income you want to protect, you don't want to be a financial burden to those you love, and you want a choice in the type of care that you receive.
Being financially ready for the possibility that at some point you will require long-term care is an important part of retirement planning. In fact, statistics show 70 percent of people who reach 65 will need long-term care. And with long-term care costing as much as $250 a day, it doesn't take long to completely deplete a lifetime of savings-even if you're "lucky" enough to only need it for a relatively short period of time.
If you're considering long-term care insurance, consult with a qualified insurance agent who can help you decide if long-term care insurance is right for you. And remember, like most life and health related insurance policies, long-term care insurance is often more affordable the younger and healthier you are. So it's best not to delay.