Am I prepared for long-term care expenses?
In general, Americans are not sufficiently prepared to pay for long-term care expenses. Many of them go through their lives simply hoping that they won’t ever need it. Unfortunately, in the event that you or a loved one does need long-term care, hope won’t be enough to protect you from potential financial ruin.
Self-insurance as an option for long-term care expenses
To self-insure — that is, to cover the cost yourself — you must have sufficient income to pay the rising long-term care expenses. Keep in mind that even if you have sufficient resources to afford long-term care now, you may not be able to handle rising future costs without drastically altering your lifestyle.
The Medicaid option
Medicaid is a joint federal and state program that covers medical bills for the needy. If you qualify, it may help pay for your long-term-care costs. Unfortunately, Medicaid is basically welfare. In order to qualify, you generally have to have few assets or will need to spend down your assets. State law determines the allowable income and resource limits. If you have even one dollar of income or assets in excess of these limits, you may not be eligible for Medicaid.
To receive Medicaid assistance, you may have to transfer your assets to meet those limits. This can be tricky, however, because there are tough laws designed to discourage asset transfers for the purpose of qualifying for Medicaid. If you have engaged in any “Medicaid planning,” consult us to discuss any new Medicaid rules.
Long-term care insurance
A long-term care insurance policy may enable you to transfer a portion of the economic liability of long-term care to an insurance company in exchange for the regular premiums. Long-term care insurance may be used to help pay for skilled care, intermediate care and custodial care. Insurance can help protect your family financially from the potentially devastating cost of a long-term disabling medical condition, chronic illness, or cognitive impairment.
A complete statement of coverage, including exclusions, exceptions, and limitations, is found only in the policy.
Long-term care riders
A number of insurance companies have added long-term care riders to their life insurance contracts. For an additional fee, these riders will provide a benefit — usually a percentage of the face value — to help cover long-term care expenses. This may be an option for you
What is it? Long-term care insurance (LTCI) In return for your payment of premiums, a long-term care insurance (LTCI) policy will pay a selected dollar amount per day (for a selected period of time) for your skilled, intermediate, or custodial care in nursing homes and,
What is long-term care? Learn more about the types of long-term care below. In general, long-term care refers to a broad range of medical and personal services designed to assist individuals who have lost their ability to function independently. The need for this ongoing care
Am I prepared for long-term care expenses? In general, Americans are not sufficiently prepared to pay for long-term care expenses. Many of them go through their lives simply hoping that they won’t ever need it. Unfortunately, in the event that you or a loved one
Determining the Need for Long-Term CareInsurance (LTCI): How Much Is Enough? To determine the need for long-term care insurance (LTCI) depends on your financial ability, age, health status, retirement objectives, and whether you have assets you want to protect. Once you’ve made the decision to