Is long-term insurance something you think you need? Many do not think about this type of insurance and when a catastrophic illness strikes, your life savings can be drained in just a few short months.
There are two choices for someone with no long-term care insurance; pay for care with your savings, or spend down until you qualify for Medicaid. With the recent budget cuts in congress, keep in mind that Medicaid covers less and less and does not pay long-term expenditures.
Private LTC carriers are going through financial hardships as well. Healthcare costs have risen dramatically and the payouts are higher than premiums that are coming in. Lower interest rates make it difficult for investing the premiums and many companies have pulled out of the market, while others have increased their rates. Consumers are more wary than ever about buying insurance.
It warrants a closer look as an important implement when you are making plans for later in life. Many LTC plans are sold with a 90-day elimination period where you pay the expenses incurred for the first 90-days and the insurance pick up anything after this period. A person filing a claim must be unable to do at least two to three of the following; walking, eating, continence, bathing, grooming, or dressing.
Department of Health and Human Services state that those over 65 are facing a 40 percent chance of living in a nursing home for the remainder of their years. There is a higher risk for men over the age of 65 and for women, and approximately 20 percent of those 85 and older are currently in nursing homes.
When looking at the cost of a nursing home or skilled-care facility, LTC may be something that Americans should seriously consider when planning for their retirement.