Q: What’s the best advice for someone contemplating buying an LTC policy?
A: Do a lot of research. Get second and third opinions about what a policy will cover should you need care. “Nobody needs 100 percent coverage for their long-term care costs,” said Burns. It should be a combination of what you can afford to pay in premiums and what you might need in coverage.
Before you buy a policy, sit down with a HICAP counselor who can give you an independent assessment of whether the coverage works for your needs.
LONG-TERM CARE: WHAT IT IS
Long-term care (LTC) insurance is designed to cover assistance with daily living activities, such as bathing, dressing, eating, toileting and moving from bed to chair. Generally, LTC policies kick in when a person needs help with at least two of those categories, either short-term or longer. The cause can be due to illness, injury or onset of dementia and Alzheimer’s disease.
—Where: The care can be provided at home or in adult day care, a nursing home, assisted-living or residential care facilities.
—Cost: Premiums varies greatly, based on your age, health condition and type of coverage. Other coverage factors that affect premiums: Amount of daily payments (typically $160-$220 per day), the waiting period before benefits start (also called “elimination period”), whether inflation protection is purchased and what long-term care facilities are covered (home care, residential facility, etc.).
—How purchased: LTC policies are sold individually by licensed insurance agents, but also offered by some private employers, group plans or federal/state employers.
LTC by the numbers:
—59: Average age of a U.S. consumer buying an LTC policy in 2010
—$2,283: Average U.S. annual LTC premium in 2010
—8.1 million: Estimated number of Americans who have LTC policies, as of 2012
—322,000: Number of Americans who took out new LTC policies in 2012
SOURCES: America’s Health Insurance Plans; American Association for Long-Term Care Insurance; California Partnership for Long-Term Care
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