Long term care insurance is meant to fill the gaps and shortfalls in Medicare Part A coverage.
Long term care insurance can help older individuals fend off financial difficulties that often accompany long term illness.
The benefits of this type of insurance extend to the loved ones of the insured individual, and we’ll get into those and other benefits in the list below.
15 Benefits Of Long Term Care Insurance
The following is our list of the most important benefits of long term care insurance, presented in no particular order.
1: Long term care insurance can save you money.
This is the most obvious reason to choose long term care insurance. According to the government, more than two-thirds of all seniors will require long term care (1). On average, they will need some form of long term care for three years. You can try to save the several hundred thousand dollars needed to pay for that length of care, or you can purchase LTC insurance for a fraction of that amount.
2: Long term care insurance fills the gaps left by Medicare.
Many Americans make the mistake of thinking that Medicare will provide for their healthcare needs when they are old. The fact is, full Medicare hospitalization coverage ends after 60 days, and partial benefits run out after 120 days. Considering that people who need long term coverage typically need it for three years, you can see the magnitude of the potential financial shortfall.
3: Long term care insurance increases care options.
It would be wonderful if everyone who needed long term care was treated equally, regardless of their financial situation. But in our world, things often do not work out that way. The fact is, the better your insurance coverage, the more healthcare options you are likely to have access to. This can make a critical difference in the quality of the care you or your loved one receives.
4: Long term care insurance frees family members to return to work.
Many people prefer to convalesce at home. And while this can be more uplifting to the spirit, it can also become something of a burden on loved ones caring for the sick or injured person. Long term care insurance enables the family to bring in healthcare professionals to care for their loved one. This lessens the impact on family and careers.
5: Long term care insurance reduces stress on loved ones.
With the cost of nursing home care around $100,000 per year (more in some states), children of elderly parents with limited financial means are under enormous stress (2). Long term care insurance can help alleviate that stress. Children know their parents will be cared for, and that care will not come at the expense of anyone losing their home or having to declare bankruptcy.
6: Long term care insurance lets you keep your assets.
It’s not just the children of elderly parents going broke because of long term care costs. More elderly parents than ever are losing assets trying to keep up with the cost of long term care (3). That includes stocks and bonds, artwork, and even their home. By the time they pass on, there is little or nothing left to pass on to their descendants. TLC insurance can prevent this.
7: Long term care insurance is highly cost-effective.
Some people suggest that the best way to prepare for long term care expenses is to save. Nothing could be further from the truth. A person would need to save more than $1,500 per month every month for more than 20 years to have enough to afford the same care they could get for spending less than $200 per month on LTC insurance.
8: Long term care insurance provides a range of choices.
Long term care insurance is not a one-size-fits-all proposition. You have numerous choices regarding the length of the ‘elimination period’, the number of years you are covered, what is covered, and more. You can also choose whether to have a stand-alone LTC insurance policy, or one that is bundled with life insurance and allows you to use some of the death benefit to cover long term care costs.
9: Long term care insurance plans are flexible.
The plans we just mentioned that are bundled with life insurance policies provide a lot of flexibility and can be more cost-effective than stand-alone policies. While the LTC benefits are typically more limited than you will get with a stand-alone policy, they are also more affordable. And you have a number of options regarding how much of your death benefit (if any) you decide to apply to long term care.
10: Long term care insurance premiums may be tax deductible.
This is a little known fact that can make a substantial difference in deciding whether long term care is right for some people (4). As long as the premiums amount to 10 percent of a person’s adjusted gross income, they (the premiums) can be deducted from federal taxes. If a person is self-employed, there is no minimum gross income threshold.
11: Long term care insurance results in better care.
An industry report detailing the effects of LTC insurance determined that people with long term care insurance receive more attention from healthcare providers than those without insurance. They also tend to receive care that is better targeted to their particular needs than people who lack proper coverage. That is not a slight on healthcare providers, it is just the way it is.
12: Long term care insurance enables seniors to retain physical independence.
The possibility of losing everything to pay for long term care hangs over millions of older Americans like a dark cloud. Many fear the only way forward will be to sell their homes and move into an assisted living facility. But with LTC insurance, they can receive high-quality care right in their own home, and retain their independence and dignity.
13: Long term care insurance enables seniors to retain financial independence.
There are a lot of good reasons to never buy a house (5). But not owning a home can come back to haunt people later in life. When it comes to paying for long term care, you have no home to sell. Unless you have a ton of savings, that means you will be dependent on others to pay for your long term care. LTC insurance can remove the specter of financial dependence.
14: Long term care insurance can protect against inflation.
Some policies offer an optional feature that increases the benefit to keep up with inflation. That way, you do not find yourself suffering a financial shortfall because prices have increased 10-fold since you bought the policy. If you are a decade or more from retirement, you will need to consider inflation when buying long term care insurance.
15: Long term care insurance provides peace of mind.
Most people would agree that getting old beats the alternative. Still, old age is often no picnic, either for the aging person or their loved ones. Anything that can be done to relieve as much stress and anxiety as possible should be done. Long term care insurance is one simple way to ensure that your or your loved one’s old age is as stress-free and enjoyable as possible.
Long term care insurance can help people beset by chronic illness stave off financial calamity by filling the gaps in Medicare coverage. This type of insurance also lifts the financial burden off the shoulders of loved ones and can often result in a higher level of care for the affected individual.