Debunking Long-Term Care Insurance Myths

It has been estimated there is a 70% chance that individuals, 65-years-old or older, will need access to long-term care. As of 2012, the cost of a full time nursing home room is a staggering $82,000 a year. In-home care with a licensed home health aide would total more than $55,000 annually. Statistics like this point to the need and benefit of purchasing long-term care insurance. Purchasing the policy while you are young will dramatically decrease the policy premiums.

Insurance agents hear many myths when it comes to the reasons why individuals feel they do not need to purchase along-term care policy, including:

  • My savings and my spouse will take care of me. Individuals who have worked and saved their entire lives may very well have a large nest egg. That savings, however, can be very quickly depleted in the event of an illness or injury. Many individuals are in denial and believe, “It will never happen to me,” but the statistics do not bear it out. If you or your spouse develop Alzheimer’s disease or became physically disabled, the care needed could be greater than one spouse alone could provide.
  • Medicare will cover my bills. Access to Medicare is one of the biggest misconceptions that individuals have. Health insurance, which includes Medicare, will pay for hospital and medical bills but will not cover the costs of custodial care for a long-term disability or illness. Custodial care includes helping the individual get dressed, bathing, eating, taking medications, undertaking physical, or occupational therapy. Medicaid is available for individuals with long-term health care expenses but this is accessible only after the individuals have depleted their assets and savings.
  • Not everyone can afford long-term care insurance. Individuals making less than $30,000 a year or couples that earn $80,000 annually may find the premiums for long-term care out of reach. In this case, these individuals may be forced to deplete their assets and rely on Medicaid or other federal and state programs to cover long-term care housing. However, there are tweaks individuals can make to their long-term care policy to bring the premium down to a manageable level. Ask your insurance provider about lowering the daily benefit amount, the inflation rider, and even the number of years of coverage the policy provides. Raising deductibles can also lower the premium.
  • Long-term care insurance is for the elderly. This is a common misconception because when you are just starting a career or are in your early 30s or 40s, the idea of aging and being in need of long-term care is a long way off. Individuals that develop conditions such as high blood pressure, heart conditions, or diabetes may find themselves ineligible for coverage under a long-term care policy. Long-term care insurance should be researched as individuals reach age 50, hopefully prior to the time when health conditions begin to plague them.
  • Long-term care insurance is only needed if I go into a nursing home. While it is true that many seniors require nursing home care, a long-term care policy can be used to pay for in home care as well.
  • The policy’s elimination period will count as the waiting period. Many insurance policies have an elimination period, sometimes 90 days, during which the policy will not pay for services. A long-term care elimination policy begins after you have met the terms for the policy and have paid your premium. Many policy providers will not cover an individual who cannot perform two out of these six daily living activities: bathing, eating, dressing, using the restroom, the ability to get out of or into a bed, chair, or wheelchair without assistance, and maintaining continence.

    Long-term care insurance provides coverage not only for nursing home or in home healthcare but also provides a measure of financial security for the remaining spouse.