Finding a good long term care insurance price that will pay for your care.
"A year in a nursing home now averages more than $40,000 and can exceed $100,000 annually in some parts of the country." - The Wall Street Journal 3/31/99
These numbers are from 4 years ago. Imagine with inflation what they are now.
Obviously Long Term Care services are very expensive. Quality nursing homes are always filled to capacity and they are consequently able to command a hefty fee for services.
Home care is also expensive. Bringing a home health aide into your home every other day for a 4 hour visit can easily cost $1800 per month. When the home care approaches 8 hour visits every day, the costs rise to $7200 per month. At this point, the care recipient begins to receive facility based care simply for economic reasons.
"People need to prepare before it's too late," says American Society on Aging. It is inevitable for most of us that at some point in our lives, we will require long term care. Americans aged 65 and older, have a 70% chance of needing long term care and as life expectancies rise, the number of adults needing long term care will also increase. Are you prepared with the often devastating cost of long term care?
There are 4 main ways in which to pay for long term care, cash, Medicare, Medicaid, or private insurance. Before you begin paying for long term care insurance it is critical that you plan early so you make the best decision possible. Mr. LTC is dedicated to providing you with the knowledge you need for your important long term care choices. Knowledge is power.
Paying with Cash
If you are fortunate enough to live very comfortably financially this may be a good option. A stay in an assisted living facility or care in your own home can range in price from $50,000-$100,000 a year. Please be aware that the average stay in a nursing home is 2.5 years according to Eelderweb.com
Medicare is basically health insurance for mature adults. This will pay for some services including, doctor's services, outpatient hospital treatment, and some in home care. It will cover some, but not all care in a skilled nursing facility. You will pay $105 per day for days 21 through 100 per stay in a Skilled Nursing Facility plus all costs beyond the 100th day.
Medicaid will eventually pay for your long term care expenses, however the benefits only begin after the majority of your assets have been depleted. Medicaid is often referred to as welfare for the elderly.
Long Term Care Insurance
Long Term Care insurance has evolved and typically covers a broad range of services including nursing home care, assisted living facilities and adult day care.
Like any insurance product, Long Term Care insurance allows the insured to pay an affordable premium to protect an unaffordable catastrophic event.
Is long-term care insurance a "bad investment?"
Here's my personal story. You decide for yourself.
I purchased a Lifetime Benefit long-term care policy at the age of 42. Premiums are less than $1,000/yr.
This year, at age 51, I went into claim to reimburse expenses associated with Early-Onset Parkinson's Disease.
Assuming I live until my life expectancy (not uncommon with PD), and my policy pays its maximum benefit schedule, here's the final tabulation:
I will have paid less than $9,000 in premium and received more than $2,190,000 in reimbursed expenses.
NOTE: Our original question has still not been answered, and never will be. With rare exception, we don't "invest" our money in insurance; we purchase insurance from a large risk pool, so that when we have to indemnify a contingent liability (cover a future financial loss), the risk is diluted over the entire pool rather than just one person.
But putting all that gobbledygook aside for the moment, I can safely say that the purchase of my LTC insurance was the wisest and most forward-thinking, financial decision of my life.