You’ve probably considered your parents growing old and eventually passing at some point. This is never a positive thought or experience, but it’s a part of life. However, what happens during the period between their retirement and their final moments?
For some, they’ll continue life like always, and there’s not too much to worry about and happier things to focus on besides maintaining their health. However, it’s also just as common for illnesses and health issues associated with aging to create an extreme need for extensive care. In fact, 52% of adults over 65 end up requiring some form of long-term care((1)).
In the event this happens, it’s often the children who will end up being key parts of their parents’ care programs. For a number of reasons, having long-term care insurance for your parents is important for weathering this phase of life for both your parents and you.
Let’s take an in-depth look at what long-term care insurance is, how it makes such a complicated part of life easier, and what you need to know about the various options available when applying for disability insurance.
What is Long-Term Care Insurance?
When you think of health insurance, you probably think of your primary insurance policy; how it pays for your medical bills if you break your arm, need a checkup, or end up needing a round of antibiotics. Long-term care insurance is a lot like that, but instead of focusing on the short-term health concerns that almost everyone will deal with at some point, it covers the bills associated with more ongoing problems that last longer than just a few months.
Usually, you’ll think of nursing homes and assisted living when you think of long-term care insurance, and those are common uses for it. However, the list of things long-term care insurance will help cover is fairly extensive, and it can actually be useful for most people; not just your parents. We’ll cover that in a later section, though.
Why Do Your Parents Need Long-Term Care Insurance?
So, if only 52% of adults over 65 end up needing long-term care, why do your parents need long-term care insurance, and why should it be a concern for you?
Well, the health problems associated with long-term care aren’t necessarily things your parents are likely to be prepared for, and they often creep up out of the blue. More importantly, many of the issues produce problems that aren’t practical for the family to care for at home.
Something seemingly small as a minor fall might produce injuries that are serious enough to require more than a year of rehabilitation and extended care in a nursing home, those minor lapses in judgment your parents have had for a decade might suddenly present themselves as dementia and require professional care, terminal illnesses are more common and faster acting in elderly people, and there are tons of other things that might suddenly force an elderly individual into a long-term care situation.
Many families do attempt to provide at-home treatment, but even that often entails some sort of long-term care service.
Here are the ways long-term care insurance can help you if something unfortunate does happen to one of your parents.
We’ll cover all the uses for long-term care soon, but it’s not just for nursing homes. It can also cover some at-home forms of care. Even if your family attempts to care for your parents in a home environment, it may be necessary to have someone come to the house daily to administer more complex medications or rehabilitate injuries properly.
These may be crucial parts of the treatment plan, or they might be simple respite services to give you time off from the stressful duty of caring for someone with medical needs.
The sudden onset of major health problems isn’t just a mental and physical stressor; the services required are expensive. The average nursing home stay costs between $7,500 and $9000 per month ((2)).
Without some form of long-term care insurance paying the bulk of those costs, a parent’s estate might need to be liquidated to pay for their care needs for as long as possible, and their children are often financially burdened with pulling up the slack to keep their parents in a proper care facility. There are government programs available, but they have their own shortcomings.
This can be the catalyst for extreme financial stress as you attempt to get your parents the care necessary to keep them comfortable and healthy, and long-term care insurance for your parents can help prevent that from being a problem.
Peace of Mind:
Long-term care insurance for your parents also helps you keep peace of mind if it’s purchased before such serious issues present themselves. The implications of many of the health issues elderly people face are a lot to deal with, but knowing that your parents are equipped with the tools necessary to tackle those problems should they arise takes a lot off your shoulders.
What Does Long-Term Care Insurance Cover?
Long-term care insurance can cover numerous forms of care, and you can expect your parents to get a lot out of it; even if they don’t need a nursing home or assisted living in their lifetime. It’s important you know what does disability insurance cover.
When an elderly individual, or even a younger individual who is severely injured or sick, requires healthcare that is simply too extensive to be done at home and too ongoing to be handled in a hospital environment, a nursing home is often the solution to ensuring the patient receives 24/7 professional care in a safe long-term care environment.
Assisted living is similar to nursing home care, but it’s usually to help with less serious health situations. A comfortable living space is provided with all the normal necessities such as cooking and entertainment being met, and there are on-site specialists available to provide care.
This is useful when parents have trouble cooking for themselves, moving around safely, and otherwise carrying out daily tasks, but the family isn’t able to provide 24-hour help.
Daycare services are also covered by long-term care insurance. These adult day care services are outpatient services where elderly or disabled adults spend a limited time each day among similar adults, receive some minor care, rehabilitative aid, or similar services, and maintain their health.
In some scenarios, families take on the burden of care 24/7. This can lead to extreme levels of stress since the job never ends. Respite services are available that introduce a care professional for a short period and allow caregivers to have time to recharge or handle their personal lives.
Home assistance services help those disabled by injuries, conditions, or illnesses to handle daily cleaning needs, cooking, hygiene maintenance, and other basic daily requirements
If your parent takes a hard fall and is hospitalized, their treatment plan won’t stop at the hospital. They’ll need extended care after their hospital stay to recover fully. Long-term care insurance can help pay any acquired costs for this recovery care.
If you would like to care for your parent during their time of need, long-term care insurance can pay for caregiver training that allows you to get paid while caring for your parents.
If your parent is placed in a nursing home, but then has to spend a long period in the hospital for more extensive care, they can lose their bed. If that happens and the nursing home reaches its capacity, they may need to go to an entirely new nursing home upon their release from the hospital.
Long-term care insurance can pay bed reservation fees that prevent this from happening.
How Much Does Long-Term Care Insurance Cover?
The answer to this will vary wildly depending on the exact policy your parents purchase, but if they take the time to speak to a consultant such as Policy Solver before purchasing an LTC insurance policy, they will be able to get the right coverage they need at the best price available.
For nursing homes, assisted living, and the vast majority of at-home care services, long-term care policies can cover the service costs in full ((3)). Although, the amount of coverage provided by a policy might limit or restrict your parents to facilities within its benefits coverage. Luckily, this is far more flexible than what Medicare covers.
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Who Can Purchase Long-Term Care Insurance?
Long-term care insurance is a form of private insurance. This means that anyone can get it as long as they can afford to pay the policy issuer the required premiums, and they are approved during underwriting.
Due to the age-based nature of the care LTC covers, the older your parents get, the more expensive it will be to purchase a policy that will actually cover their needs. It will also be a little harder to get since health conditions start to creep up as parents age, and it could impact their ability to get approved through underwriting.
This is why most people choose to purchase coverage around the age of 55 ((4)).
It may be ideal to begin suggesting LTC insurance to your parents as they reach this age to better prepare for the fast-approaching future and minimize premium costs.
How Much Does Long-Term Insurance for Your Parents Cost?
Looking at top US LTC insurance providers such as Guardian, the average cost of LTC insurance for a 60-year-old adult is between $2000 and $4000 per year, and if a Return on Premium feature is added, that figure can double or triple in size ((5)).
What if My Parents Can’t Afford Long-Term Care Insurance
As you can see, long-term care insurance for your parents, especially if they’re over 60 or require a Return on Premium feature, can be expensive. If they’re unable to afford those costs, there are still options available, though. The only practical option that exists if your parents can’t afford long term care insurance, is either to have you or other family members take care of them when they have long term care needs, or use their retirement savings to pay for care. Medicare will not pay for long-term care needs.
Should You Get Long Term Care Insurance for Your Parents?
Ensuring that your parents get a proper long-term care insurance policy is a great option if your parents can afford it. It’s not just an investment for their own good, but it’s also beneficial for you.
The illnesses, injuries, and conditions that usually cause long-term care to be a necessity are unpredictable and can strike at any time. This can impact your parents in obvious ways as their health declines and they struggle to pay for care, and it can also impact you dramatically as you shoulder that burden to take care of the ones you love.
Because of this, even if your parents are in good health now, encouraging them to get a long-term care insurance policy before their health takes a turn for the worse can give you and them the peace of mind you both deserve.
With that being said, it’s not always feasible to pay the premiums if your parents are financially unprepared.
How to Buy Long Term Care Insurance for Your Parents
As you can see, choosing the right long term care insurance for your parents can be a difficult task, and there’s a lot on the line.
Luckily, consultation services such as Policy Solver can help you navigate the complicated insurance market to find the perfect policy for your parents’ budget and needs.
1: Taken from Long-Term Care Consulting Services, 02/10/2022, https://www.ltccs.com/blog/long-term-care-statistics-2018/#.YgU2AZbMJPY
2: Taken from Consumer Affairs, 02/10/2022, https://www.consumeraffairs.com/health/nursing-home-costs.html
3: Taken from Investopedia, 02/10/2022, https://www.investopedia.com/terms/l/ltcinsurance.asp
4: Taken from American Association for Long-Term Care Insurance, 02/10/2022, https://www.aaltci.org/long-term-care-insurance/learning-center/best-age-to-buy-long-term-care-insurance.php
5: Taken from BravoPolicy, 02/10/2022, https://bravopolicy.com/long-term-care-insurance/long-term-care-insurance-calculator/
6: Taken from Medicare website, 02/10/2022, https://medicare.com/coverage/medicare-cover-long-term-care/