How to Afford Long-Term Care

How to Afford Long-Term Care bb3 Jun 7, 2012

By Staff Writer

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Itís likely that at some point in your life you will need assistance with your daily activities. In fact, the U.S. Department of Health and Human Services estimates that 70 percent of people over age 65 will eventually need long-term care, whether in a home setting, a senior living community or a nursing home.

Long-term care insurance can help cover the costs of these services and may help you preserve your financial resources. Keep these factors in mind if youíre thinking about purchasing coverage:

  • Age. Look at long-term care insurance well before you need it. The older you are, the more you can expect to pay for your plan. Also, if you wait, itís more likely youíll have developed a health condition that may disqualify you from getting coverage. While thereís no ďrightĒ age to buy, the American Association for Long-Term Care Insurance estimates more than half of long-term care policies are purchased by people ages 55 to 64.
  • Affordability. Coverage and cost vary, so shop around for a plan that will be reasonably affordable rather than choosing one that breaks your budget. The National Association of Insurance Commissioners recommends spending no more than 5 percent of your income on a long-term care policy.
  • Features. Itís not easy to evaluate different plans. Be sure to compare these key features:
    • Benefit trigger. The criteria or event the insurer uses to determine when your policy will go into effect.
    • Elimination period. The number of days youíll pay for care out of your own pocket before you begin receiving benefits. Thirty days is the minimum elimination period for many long-term care plans.
    • Daily benefits. The amount the policy will pay on a daily basis. Some plans pay benefits based on the hours of service, such as the number of hours a home health aide visits your home.
    • Inflation adjustment.A feature that helps your benefits keep pace with rising costs.
    • Types of services. A description of whatís covered under each plan and where you may receive this careóat home or in an assisted living residence, adult day care facility, nursing home, or other setting.
    • Duration of benefits. The length of time youíll receive benefits, from a few years to as long as you live.
    • Exclusions. Stipulated conditions or acts that the benefits wonít cover. These could include conditions caused by alcoholism or dangerous behaviors.

Learn more about long-term care insurance from the HHS National Clearinghouse for Long-Term Care Information. Contact your State Farmģ agent to discuss policy options that may be available to you.

The information in this article was obtained from various sources. While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. These suggestions are not a complete list of every loss control measure. The information is not intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. Nor is it intended to effect coverage under any policy. State Farm makes no guarantees of results from use of this information. We assume no liability in connection with the information nor the suggestions made.

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