You insure your house, your car, your business, and your health. But have you thought about coverage for your quality of life? A long-term care insurance plan can help you have your best life even in periods of disability and declining health.
No one ever knows what life will have in store for them as the days and years go on. Fortunately, there is a wide range of protection available for different seasons of life.
With the right type of coverage from Lake Region Insurance Agency, at least you can have help in uncertain times. Call or stop by one of our Greater Minnesota offices for a free insurance quote today.
What Does a Long-Term Care Insurance Plan Do?
In general, long-term care policies do not provide significant coverage for medical care, such as physician visits or prescriptions. The intention behind long-term care insurance is to help pay for other services such as nursing home care or physical therapy.
This type of policy may help fill in the gaps in a person’s care as they age or if they encounter a disability with long-lasting impacts. It is a supportive policy that is separate from medical insurance.
Important Notes About Long-Term Care Insurance
A lot of confusion surrounds these types of insurance plans. And this confusion leaves many people unsure whether or not they should purchase a policy. Unfortunately, it can also leave some people without financial protection as they age.
Here are some critical things to keep in mind as you talk with your financial planner and insurance agent.
Your Health Insurance Doesn’t Cover Long-Term Care.
This fact is a surprise to many people, but your medical insurance does not cover long-term care. Health insurance plans pay for the cost of receiving medical treatment for an injury or illness.
Think about this scenario. You are up on a ladder, cleaning your gutters. You’ve made several trips up and down, moving the ladder a few feet each time. It’s hot. You’re tired.
Suddenly, the ladder tips. You flail and try to throw yourself clear, but your foot tangles in the rungs. You land square on your keister and break your hip.
Once you meet the deductible, your health insurance should cover the cost of any medically necessary x-rays, surgery, and hospital stay resulting from the fall. It might even cover the cost of staying in a rehabilitation facility for a short while.
But what happens if you can’t go back home for a much longer time? Or what if you have long-lasting complications that require specialized care or therapy?
The same insurance that paid for medical care to fix your hip will not be covering the cost of someone helping you live your life. Extended nursing care and ongoing therapy generally do not fall under the scope of a health insurance policy.
Long-Term Insurance Can Be Part of a Financial Plan
Does the scenario where you break a hip seem far-fetched? Unfortunately, it’s not. Once you turn 65, there is about a 70% chance that you will need long-term care of some kind. Aging inherently raises the risk of something happens that limits your ability for self-care.
With this in mind, many people choose to purchase long-term care insurance. Other people opt to rely on different financial assets they have in place instead.
Long-Term Care Insurance Prices Can Vary Significantly
If you choose to purchase a long-term care policy, you’ll get the best rate in your fifties or early sixties. And prices vary from company to company. Be sure to opt for an independent agent to receive the best quote.
Insurance companies consider many factors when pricing your plan, including:
- Your Health – Minor health conditions probably won’t keep you from getting a policy. But if you already need assistance or have a diagnosis such as cancer when you start shopping for a plan, you are unlikely to secure an affordable one, if you can get one at all.
- Gender – Women are a bit more likely to need assisted care, so their policies tend to cost more.
- Marital Status – If you’re married, the insurance companies think you’re a safer bet. Your premium will be a little lower.
- Amount of Coverage – As with any insurance policy, the limits will determine the premiums. Long-term care insurance plans don’t cover you indefinitely. Your policy will have a total value. If you buy a $100,000 policy, it will stop paying after they’ve covered that amount.
- Elimination Period. This is the amount of time you need to be in the hospital or assisted care facility before the plan kicks in. Longer elimination periods offer lower premiums.
For example, if your health insurance covers 60 days of care, and you are comfortable paying for 30 days, you can choose a 90-day elimination period.
It’s important to note that traditional long-term care policies adjust their prices yearly. Your premium is likely to rise as you age. Consult your insurance agent about reasonable expectations as time marches on.
You Might Prefer a Hybrid Policy
Some insurance companies also offer a new kind of hybrid policy. A hybrid plan provides whole-life coverage and also lets you draw from the value for long-term care needs.
If you never need long-term care, this policy will pay out to beneficiaries upon your death like any other life insurance policy. If you do need long-term care, the death benefit reduces by the amount of money used for your care.
The hybrid plan has a level premium, so you don’t have to worry about the monthly payment increasing.
Work With an Experienced Agent
No matter which part of life you are in, there is undoubtedly an insurance product that applies to your circumstances. Whether you need auto, homeowners, health, or life insurance, your Lake Region team can help.
It’s a privilege to help our Greater Minnesota neighbors as they protect themselves and their families. Our independent agents offer free insurance reviews and quotes. We work for you, not for the insurance companies. Give us a call or stop in to see us in Cokato, Willmar, or New London, MN.