The reality is that about 70% of seniors will require long-term care services at some point in their lives. The service offers daily assistance to people who are unable to perform two or more Activities of Daily Living (ADLs). It is crucial that you start planning long-term care coverage early to avoid mountains of debt. You must keep in mind that long-term care premium rates vary depending on whether long-term care services are provided inside your home, an assisted living facility, or a nursing home.
Long-term care ensures that people receive help with a variety of essential tasks such as bathing, dressing, eating, using the bathroom and a couple others. Read our complete guide on long-term care rates to understand long-term care rates better. First, we’ll start with defining long-term care.
A General Outlook on Long-Term Care
What Is Long-Term Care?
Long-term care refers to a variety of services that are designed to cater to the health or personal care needs of an individual for a short or long period of time. It allows individuals to live as safely and independently as possible when they cannot perform daily activities on their own any more. Long-term care is offered at different places by different caregivers based on the needs of an individual.
The majority of long-term care tends to be provided by unpaid family members and friends or homemaker services at home. It is also provided in places like nursing homes, assisted living facilities or adult day care centers.
How Long-Term Care Insurance Compares To Other Insurance Types?
Long-term care insurance policies are different from other types of insurance policies. They cover a portion or all of the cost of care. However, they vary in terms of amount of coverage, policy type, and price.
In order to receive benefits from a long-term care insurance policy, you must be unable to perform two of the six activities of daily living for a sustained period of time. By purchasing long-term care insurance at a younger age, you will be able to pay a lower premium. However, if you already have health issues when you go to apply for a long-term care insurance policy, you might not be able to qualify for one.
Unlike other types of insurance such as health insurance, medical insurance, or even life insurance, long-term care insurance covers most of the tab for assisted living, home health care, and nursing home stays. Moreover, one would also be eligible for a federal income tax deduction on premiums. So, there are certainly a lot of advantages to having a policy.
Three Basic Levels of Long-Term Care
Long-term care is divided into three basic levels as mentioned below.
- Skilled Care: The first basic level of long-term care is skilled care. Its main purpose is to treat injuries and illnesses. It is normally prescribed by a general physician and performed by a licensed medical expert such as a registered nurse and professional therapist who work with the patient to develop a treatment plan.
- Rehabilitative and Intermittent Care: Another basic level of long-term care is rehabilitative and intermittent care. It includes services that are offered by a licensed or registered practical nurse and a skilled nursing aide who follow the instructions of a physician.
- Custodial Care: This level of long-term care is designed to assist people with daily activities such as bathing, eating, and getting dressed.
It is important to mention here that having an agent advise you on different insurance packages and options is crucial to getting adequate insurance.
What Are Long-Term Care Rates?
- Long-term care rates refer to the cost of long-term care insurance. They vary depending on the type of care you need, where you live, your provider, and the duration of your service. Some of the examples of long-term care expenses according to 2020 data from the insurance firm Genworth Financial are mentioned below. These are the averages.
- Nursing Homes: The cost of a semi-private room at a nursing home is \$255 a day or \$7,756 a month. For a semi-private room, the cost is $293 a day or $8,821 a month.
- A Bedroom Unit at an Assisted Living Facility: The cost for a one-bedroom unit is \$141 a day or \$4,300 a month.
- Home Health Aide: The cost of home health aide is \$150 a day or \$4,576 a month.
- Adult Day Health Care Centers: For a day at an adult day health care center, one has to pay $74 a day which means that it would cost $1,603 a month.
Long-Term Care Rates – Figures
How Much Is Long-Term Care Insurance Per Month?
For those interested in paying monthly rates for long-term care insurance, they will typically cost around $225 a month. Some individuals will find the cost to be unaffordable. However, it is important to bear in mind that a plan takes into account location, age, and maximum benefit selections. All of these will influence the overall cost. Generally, monthly long-term care insurance costs increase with age and factor in your medical conditions, so it’s better to get it when you’re younger and still healthy.
What Is The Average Annual Cost Of Long-Term Care?
When we look at the data provided by the American Association for Long-Term Care Insurance, the following annual premiums would need to be paid in 2022.
How Much Does 24/7 In Home Care Cost Per Month?
The American Association for Long-Term Care Insurance estimates the monthly cost of 24/7 home care tends to be much higher as additional service, safety measures, and staff are needed. In fact, it is possibly the most expensive option. Adults that decide to receive round-the-clock care at home will be charged an average cost of $17,472 a month for 24 hours care seven days a week. Moreover, neither Medicaid or Medicare provides coverage for 24/7 home care. Hence, assisted living communities will prove to be a much cheaper option.
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The Differences between Long-Term Care Rates and Short-Term Care Rates
Anyone considering getting insurance for covering a nursing home, in-home care, or assisted living costs must know the differences between long-term care rates and short-term care rates to ensure that they choose the right option.
Understanding long-term care rates is important, but you also really need to understand that short-term care is a form of long-term care. However, it only provides care for up to 12 months and not more. It is common for some insurance companies to refer to short term care rates as recovery care rates. But, there are a few key differences that you need to know about as mentioned below.
- Costs: Short-term care rates are significantly lower than long-term care rates. The reason for this is short-term care involves shorter-term coverage in comparison to long-term care. In addition to this, short-term coverage represents a lower financial risk as well. Moreover, short-term care rates are also not sex-based.
- Benefits: The next difference between long-term care rates and short-term care rates is evident when we look at benefits. Long-term care rates cover the cost of home care, adult day service centers, assisted living, and home care, unlike short-term care rates that do not provide as many options. If you think that you will be unable to use all your long-term care benefits, a short-term insurance care policy will serve as the best option. However, there are some long-term options that restore unused benefits. Anyone who has Medicare can pay the short-term care rate to supplement the limited nursing home benefits.
- Time Involved to Receive Coverage: For those requiring funds immediately for the payment of recovery care after an emergency surgery, sudden illness, or accident, a short-term care policy might be the best option. On the other hand, a long-term care policy would require a waiting period of 90 days before benefits are paid out. This is why short-term care rates might seem more appropriate if you need payments on an urgent basis.
Are Long-Term Care Rates Worth Paying?
Long-term care rates might seem expensive. However, they are worth paying for due to a number of reasons. Although you might want to look after or be looked after by a loved one, seeking a long-term care insurance policy is a great option. Now you might be drawn to Medicaid as an option as you do your long-term care planning, but this requires you to
meet certain financial eligibility requirements. The following reasons will make you realize why long-term care rates are worth paying for.
- Your current health is great and you qualify for a traditional long-term policy.
- You have reached your mid-50s or are much younger. As you would already have noticed, long-term care rates increase as you age.
- You want to make sure that you have coverage for chronic health needs in the future and to cut down out of pocket costs.
- You want to make sure your family won’t be burdened with caring for you or your spouse.
- You want to preserve your retirement savings.
How to Find the Best Long-Term Care Rates?
To select the best long-term care insurance premium, you need the help of an agent who will provide you with valuable advice about different insurance packages and options. Unlike simpler products including life insurance, long-term care insurance has a lot more complexity and involves a detailed financial and lifestyle plan that a licensed agent can help you put together. The agent will ensure that you select a long-term care insurance policy that works best for you. To ensure that you know what to take into consideration, you should compare the following factors.
- Types of Coverage: The first thing that you need to do is learn more about the different types of coverage offered by each insurance company and find out if it can be customized. You can research policies to see what is included to ensure that you make the right decision.
- Pricing: Next, you must look at what is deductible, the refund policy, and the cost of premiums. Only when you know about all of these costs should you make up your mind.
- Discounts: There are plenty of discounts offered by insurance companies. Hence, you must research discounts offered. Feel free to inquire about additional discounts and bundling to save as much money as possible.
- Exclusions: Lastly, you must not forget to look at what the policy excludes. Find out what is excluded before you sign up for a policy.
Where Can I Find Out More And Get Advice On Long-Term Care Rates?
For the best advice on long-term care rates, consider consulting with us at Policy Solver.
Policy Solver offers the best insurance products at the best price available. We don’t get money from the customers but from an insurance carrier who the customer buys insurance from. We make our money by getting commissions from each sale, but we work for you and not the carriers.
Policy Solver’s Services
Choosing the right advisor is a difficult task.
Policy solver has knowledgeable, licensed agents, and is here to help you navigate through your long-term care insurance journey. We are a team of professional insurance policy brokers and we can save you time and money, while finding the right policy for your specific needs.
Our experienced advisors will ask you a few questions to understand your unique situation and will come up with a comprehensive analysis of different insurance plans so we will be able to recommend the best policy at the best price for you.
Now that you have finished reading the guide, our hope is you feel more prepared when it comes to understanding considerations affecting long-term care rates. It is important that you consider the advice presented above to determine the policy you should get. There are plenty of differences between short-term care and long-term care which will make you realize why long-term care might be the best option for you.
Once again, we want to remind you that you should
feel free to request a free consultation with Policy Solver. We would be delighted to help you out every step of the day.
Market Watch, Long-Term Care Insurance Costs Explained. Retrieved November 11, 2021, from https://www.marketwatch.com/picks/guides/insurance/long-term-care-insurance-cost-everything-you-need-to-know/
Investopedia, Long-Term Care Insurance Explained. Retrieved November 11, 2021, from https://www.investopedia.com/best-long-term-care-insurance-5070718
Home Care, 24/7 Home Care Costs. Retrieved November 11, 2021, fromhttps://www.homecare.org/the-cost-of-24-7-in-home-care/
Center for a Secure Retirement, Difference between Short-Term and Long-Term Care. Retrieved November 11, 2021, from https://www.centerforasecureretirement.com/Posts/How-Does-Short-Term-Care-Insurance-Differ-From-Long-Term-Care-Insurance