A
Long-Term-Care Insurance Policy for Your Parents
Life
expectancies are growing longer, and the risk of entering a nursing home after
age 65 is now as high as 49 percent.1 The
national average cost for nursing-home care is about $56,000 per year. By 2010,
the cost is projected to grow to $90,000.2
If your parents someday need long-term care (LTC), they might have to sell
important assets such as the family home to raise money to pay the cost. To help
prepare your parents for possible LTC expenses, you may want to consider
purchasing a long-term-care insurance policy for them.
LTC insurance offers one way to help offset some of the potential LTC expenses
that you or your parents could otherwise be forced to pay out of pocket.
Types
of Care
Long-term care generally refers to services required by someone with chronic,
nonrehabilitative medical conditions on a regular basis for an extended period.
These services may include everything from assistance with bathing, meals, and
medications at home to an extended stay in a nursing home.
An LTC policy can help pay for any of the three basic levels of long-term care.
Basic custodial care is primarily for those who need help with daily living
activities such as eating, dressing, and walking. Intermediate care provides
rehabilitative care or occasional nursing care by medical professionals. Skilled
care is for those who require the daily care of health-care professionals beyond
the assistance that family members are capable of giving.
Costs
One common objection to purchasing an LTC policy is the cost. Policies can be
expensive for older individuals. However, the annual premiums could cost roughly
the same as a single month of care. Keep in mind that a policy can be tailored
to an individual’s needs. For example, it could be designed to pay a high
monthly benefit but last only a few years rather than a lifetime.
The financial burden of long-term care can quickly deplete assets that your
parents had planned to use during their retirement. The appropriate policy can
help protect those assets and help your parents — or you — pay for care if
the need arises.
1) 2002 Field Guide, National Underwriter
2) Life Insurers Fact Book, American Council of Life Insurers, 2001
©
2002 Emerald Publications
