Long-term care insurance is often touted as a must-have insurance policy for older individuals thanks to its ability to protect their finances and ensure they get the best care possible when it’s needed. However, most people tend to assume it’s solely for things like extremely old age, those who injure themselves and can no longer safely stay at home, and other stereotypical things.
That would be wrong.
Long-term care insurance covers the vast majority of medical criteria that force you to get long-term medical care to help in your daily living, and that includes one of the most complicated and difficult to understand diseases affecting a staggering number of older people: Dementia.
Different type of dementia, and other forms of cognitive impairment, are covered by long-term care insurance, but just like everything, there are exceptions and certain factors that need to be taken into account.
If you’re looking to protect yourself against the life-changing effects of a dementia diagnosis, read this guide to long-term care insurance for dementia.
What is Dementia?
Dementia isn’t necessarily a disease. It’s a group of symptoms stemming from various brain conditions that are common with older adults; notably people over 60 and especially women. Alzheimer’s is a specific form of dementia.
The most notable symptoms associated with most forms of dementia are memory loss, reduced cognitive function, and unfortunately, the lack of the brain’s ability to trigger automatic bodily functions such as swallowing, bladder control, or even breathing.
This often starts very mildly with individuals forgetting their keys every day or forgetting what they’re doing at random, and then it progresses into more serious and noticeable issues such as forgetting who their spouse and family members are for a period. Eventually, many people degrade to the point that they pass on.
Unfortunately, there is no known cure for dementia, and while there are treatments available, the disease typically progresses; even if the treatment can prolong it ((1)).
What is Long-Term Care Insurance?
Long-term care insurance is a form of insurance designed to pay for your medical care, over a wide variety of possible care options, in the event that you need it. This is usually only necessary for older individuals. In fact, it’s not even recommended to purchase a policy until you’re 55 due to the cost of annual premiums and how unlikely younger people are to use their policies ((2)).
How Do You Get Long-Term Care Insurance to Cover Dementia?
You can get long-term care insurance that will provide benefits for all aspects of dementia care. Getting your insurance cover right means that beneficiaries with dementia can put their financial worries to rest and focus on their health and family.
However, you have to do things a certain way. Here are the things you need to consider to increase your chances of getting coverage.
While it’s recommended to get a long-term care plan around the age of 55, it’s important that you invest in a health plan of care a bit earlier than this to make sure you don’t end up getting a dementia diagnosis before you’ve been approved for a policy.
Insurance companies, while necessary and a saving grace in your time of need, are profit-focused. They don’t want to take on guaranteed risks such as providing a policy to someone who just got diagnosed with dementia and will likely need extensive long-term care costs within the next couple of years.
In fact, once you have a dementia diagnosis, it can be practically impossible to be approved for a policy. The same can be said about similar pre-existing conditions. Get the insurance while you’re healthy, or risk not getting it at all when you need it ((3)).
You Don’t Have to be the Recipient:
Maybe you’re a 35-year-old, and your parents are getting older. They’re not able to do everything they used to, some of their behaviors are getting odd, and you can just feel that some rough times are ahead. You do not have to hope and pray that your parents purchase long-term care insurance. You can purchase a health insurance policy for them.
This might sound like an odd idea that you won’t personally benefit from, but the opposite is actually the truth. You can benefit dramatically from purchasing your parents a long-term care insurance policy.
If your parents end up needing long-term personal care services, whether you’re financially capable or not, many of the services they’ll rely on will come to you to collect their medical costs. They’re a service, and they demand to be paid. No matter how much you love your parents, you probably can’t afford the $6000+ per month that a nursing home costs per person. If you can, it’s still a massive expense.
By purchasing a long-term care plan for them, you can get those dementia care costs paid for without financially breaking yourself ((4)).
Prepare for High Premiums:
Long-term care insurance isn’t cheap, and that’s not because of greed or any other negative assumption. The type of care long-term insurance pays for is extremely expensive, and the insurance company can be on the hook for those costs for long periods depending on the condition of the patient receiving benefits.
Because of this, you can expect to pay $1700 per year as a 50-year-old, but that number keeps climbing every year due to the increased risk of you needing care. It can get as high as $4000+ per year ((5)).
However, the average cost of long-term care from the day it begins until the day it ends is $165,000. So, it’s a lot cheaper to buy the insurance ahead of time than end up paying this massive cost of care.
What Does Long-Term Care Insurance Do for Dementia Patients?
Long-term care insurance is often pegged as solely for nursing home care and assisted living. It helps with those things, but it actually covers a lot more than that, and that fits well with a dementia diagnosis.
As you have learned, dementia doesn’t just creep up overnight and change your entire life. It’s gradual, and at different stages there may be different forms of health care services required. Luckily, long-term care insurance can cover a wide range of care options you or your loved one are likely to need. These are some of the common options:
Adult Day Care:
Adult Day Care is a common type of care where adults can go for a couple of hours each day to receive much-needed assistance, therapy, socialization, and other skilled nursing care they may be lacking at home on their own. During the early stages of dementia, this type of care can be a daily benefit.
At-home care can take three different forms. The two that involve professionals are personal care and homemaker services, and at-home nursing. This is where health care providers come to your home regularly to check on you, administer prescription drugs, gauge your overall health, clean your surroundings, and help with daily necessities such as taking a bath or cooking. This can prevent or delay the need for inpatient hospital care.
This is the third form of at-home care. If you’d rather give a family member you trust a job than pay for people you don’t know to help you, a family member can be trained to provide all the necessary supervision and types of care you need, and the state will pay them a monthly income, just like a regular job. The training to qualify for this can be expensive, but long-term care insurance will pay for it, and it saves them money.
If you’re able to stay home and rely on family to take care of you, that’s an amazing privilege, but it doesn’t come without a cost. It is an immense burden to not only watch a loved one struggle with dementia, but to also put off personal goals and mental health breaks to take care of that person’s needs. Respite care services allow your family members to take care of you while also getting a break. A trained professional will show up regularly to allow your family to focus on themselves for a period of time.
As dementia progresses and the patient’s health status deteriorates, staying at home may not be an option, even though intense medical care isn’t necessary quite yet. In that case, assisted living may be a great option. It’s a residential care facility similar to a nursing home, with skilled nursing facilities and qualified health care workers, but it has many of the perks you’d enjoy at home, and it feels more like a normal living environment with plenty of daily activities and other people to socialize with.
At its worst, dementia can not only make you forget the family members you love and how to take care of yourself, but it can also make you forget things such as how to breathe, control your bodily functions, or eat. In that case, a nursing home is almost always required. The amount of medical care and medical equipment needed is simply too much for at-home caretakers to deal with.
It’s also important to note that long-term services for people in nursing homes are extremely expensive, as outlined earlier, and without long-term care insurance, most people couldn’t afford to stay in them.
When you’re in a nursing home or assisted living center, you are essentially renting a bed. If you leave without having something in place to preserve your spot, the establishment will rent it to someone else.
Unfortunately, this is a problem because dementia often requires you to go to a hospital for an extended period.
Luckily, insurance can pay a bed reservation fee each day while you’re stuck in a hospital to ensure your bed isn’t rented out to the next person in line; providing you with security and the peace of mind of knowing you won’t have to find a new living arrangement once you’re discharged from the hospital.
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Things to Watch Out for with Long-Term Care Insurance
Long-term care insurance will likely be necessary for most people as they age, but that doesn’t mean it’s flawless. Here are some of the things to watch out for if you’re pre-emptively purchasing long-term care insurance for dementia.
Buying Too Early:
You are highly unlikely to need a long-term care insurance at a young age unless you were born with certain disabilities, but even those are often better cared for with other insurance policies like long-term care insurance for young adults.
If you’re 28 and purchasing a long-term care policy, you may be paying those high annual premiums for the next 32 years without ever getting any benefits from them. That’s a lot of money from your income that you could have put towards furthering your education, investing in fruitful portfolio options, or otherwise taking opportunities to increase the quality of your life instead of thinking of what-if scenarios for your twilight years. Understand the risks of not being insured, and definitely take long-term care insurance seriously as you age, but there’s no reason for young healthy people to waste money.
Pay Extra to Protect Your Investment:
Long-term care insurance is expensive, and you may never require any long-term care services. Do you want all of the money you spent on premiums to just be thrown away if you reach 92 years old and don’t need the coverage anymore?
Luckily, most insurance providers offer “Return on Premium” features. These usually cost extra, but they ensure that you can get a portion, or all, of the money you’ve spent on premiums back upon canceling your insurance policy. This can leave your next-of-kin with a sizeable inheritance if you time it right.
Being Under Covered is Just as Bad as Having No Coverage:
Buying the wrong policy can be just as damaging as not bothering with it at all. This usually occurs when you buy a policy with tons of restrictions or limits on what it will pay for and specially-worded terms that make it easy for claims to be dismissed.
When purchasing your insurance policy, make sure you get one that isn’t costing you more than you can afford but also isn’t prone to being pointless and not cover the cost of your personal care when you actually need it.
Get Help with Policy Solver
If you’re looking for long-term care insurance that covers dementia due to it running in your family or early signs you haven’t been checked for yet, contact Policy Solver. Policy Solver has a team of professional insurance consultants who can find the right policy to meet your needs without breaking the bank, walk you through the application process, and make sure you get reliable insurance that works in your favor instead of the insurance company’s.
1: Taken from CDC, 03/11/2022, https://www.cdc.gov/aging/dementia/index.html
2: Taken from Investopedia, 03/11/2022, https://www.investopedia.com/articles/personal-finance/052014/whats-best-time-get-longterm-care-insurance.asp
3: Taken from Alzheimer’s Association, 03/11/2022, https://www.alz.org/help-support/caregiving/financial-legal-planning/insurance
4: Taken from Senior Care, 03/11/2022, https://www.seniorcare.com/home-care/resources/home-health-care-costs/
5: Taken from Consumer Affairs, 03/11/2022, https://www.consumeraffairs.com/insurance/cost-of-long-term-care-insurance.html