An Educational Q&A with Deanny Lungu-Underwood, Esq.
Many people mistakenly believe that their health insurance or the government will pay for their long-term care needs. But the fact is, traditional health insurance doesn’t cover long-term care. And though Medicare does pay for some long-term care, it’s typically limited (covering a maximum of 100 days), difficult to qualify for, and requires you to deplete nearly all of your assets before being eligible (unless you use proactive planning to shield your assets, which an estate planning attorney can support you with if that’s important to you and your family)..
Q: What is long-term care?
A: Long-term care is a general term that describes the type of care or support you need when you are no longer able to handle activities of daily living (ADLs) on your own. ADLs include things, such as getting dressed, bathing, eating, and using the bathroom. In some cases, long-term care might simply mean that you have someone assist you in your own home with getting ready in the morning and before bed at night. In other cases, long-term care might mean you move into a nursing home to recover from surgery or manage a chronic medical condition.
Some common activities of daily living (ADLs) include:
- Ambulating (walking or getting around)
- Dressing and grooming
- Using the restroom
- Continence management
- Getting in and out of bed or a chair
Q: What is long-term care insurance?
A: First introduced as “nursing home insurance” in the 1980s, long-term care insurance is designed to cover the expenses related to your long-term care in the event you are no longer able to handle your own ADLs.
These policies cover the cost of both personal care and skilled care services whenever and wherever you plan to receive care, whether in your own home, an assisted living facility, a nursing home, or a community care facility. Some policies even cover modifications to make your home more accessible, such as adding wheelchair ramps or grab bars to your bathroom.
Q: How does long-term care insurance work?
A: Before your coverage kicks in, most policies require that you demonstrate you have lost the ability to engage in at least two or three ADLs. Most policies also have a deductible, or “elimination period,” which is a set number of days that must elapse between the time you become disabled (eligible for benefits) and the time your coverage kicks in.
Many policies offer a 90-day elimination period, but others can be longer, shorter, or even have no elimination period at all. Of course, the shorter the elimination period, the more expensive the premium. Additionally, long-term care policies typically come with a predetermined benefit period, which is the number of years of care it will pay for.
Q: When should you purchase long-term care insurance?
A: Obviously, the younger and healthier you are when you buy the policy, the cheaper the premiums will be, so the sooner you invest in coverage, the better. In fact, most policies exclude certain pre-existing conditions, so if you wait until you become ill, it can be impossible to find coverage.
According to the American Association for Long-Term Care Insurance (AALTCI), the best age to apply for coverage is before you reach your mid-50s. Beyond that age, your health is unlikely to improve significantly, so waiting longer will typically increase your premiums, or you may even become ineligible before acquiring a policy.
Q: Can I buy coverage for my parents?
A: Yes, you can buy long-term care insurance for your parents. You will pay for the policy, and then have your parent(s) listed as the beneficiary. If you know you are going to be the primary caregiver for your aging parents, investing in a policy for them can help offset the expenses related to their long-term care. Furthermore, buying long-term care insurance should always be a family affair, because you are going to need your family members to advocate for you and file a claim for the policy when you need to use it. Given this, make sure your family knows what kind of policy you have, who your agent is, and how to make a claim.
This article is a service of Deanny Lungu-Underwood, Esq. Lungu Law Group, A Professional Corporation. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. Our firm can help you with all of your estate planning needs in person or via video chat. Please call us at 562-725-7125 or email firstname.lastname@example.org to schedule an initial call.
This article is for educational purposes. It is the Relief Association policy not to endorse any one specific company.
Deanny Lungu-Underwood, Esq.
5320 E. 2nd Street, Suite 6
Long Beach, CA 90803
T (562) 725-7125