Long Term Care Insurance
Almost half of us will need long-term care, and health insurance doesn't cover it.
How would you pay for long-term care if you needed it? When baby boomers were asked this in a study commissioned by CareQuest, which helps employers set up long-term care packages, only 5% said they would rely on long-term-care insurance. Most said they expected life, health or disability insurance or government programs to cover the costs.
If that's what you're counting on, think again:
- Almost half the population will need long-term care at some point.
- The average annual cost for a private room at a nursing home is $74,095, according to MetLife Mature Market Institute.
- The average hourly cost of a health aide who gives in-home care is $19. It's double that for a licensed nurse. If you needed round-the-clock care from a nurse, you would have to pay more than $300,000 a year.
- You can't get long-term care insurance once you have a problem that requires long-term care.
How to shop for a policy
Buy sooner rather than later. The younger and healthier you are when you get a policy, the cheaper your premiums will be. A 55-year-old would pay $911 a year for a policy that pays $100 a day for three years of assistance, according to a study by the American Council of Life Insurers. A 65-year-old would pay more than double that for the same coverage. If your health is less than perfect, finding coverage can be difficult but is not impossible.
Stick with major issuers. You're buying this protection for the long term, so make sure you find a company that's going to be there a long time.
Don't skimp on coverage. Most people who have long-term-care coverage wish they had bought more, according to a recent study by LifePlans. Consider at least a three-year benefit period, which would cover the average nursing home stay. Also, a short "elimination period" (basically a deductible -- see below), even though it will increase premiums, could save you out-of-pocket costs in the long run. And look for a policy that covers care in as many situations as possible: at home, in an assisted living facility, in a nursing home.
A homeowners policy usually provides coverage for detached structures, such as a garage or shop building, equal to 10% percent of the value of the home. But if that detached building is used for business in any way, there is no coverage; even incidental use like storing business equipment or inventory. Business use is some activity where you make money or make a trade in value for your service, even if there are no customers visiting the premises. The same exclusion applies to a detached structure which is rented for residential purposes, like a guest house or apartment. That small business requires special insurance to cover the building, equipment, inventory and liability exposures. So if you are painting cars, building birdhouses, a contractor, or have an apartment, office studio, school, day care, etc. You need special insurance. Give us a call to get a quote today.