If you or a loved one turned 65 in 2020, there’s a 70% chance that you’ll need some sort of long-term care or assistance during the “golden years”, at least, according to the US Department of Health and Human Services. With the average annual cost of home care being $54,000 and care facilities at $96,000, long-term care insurance can play a crucial role in ensuring you or your loved ones spend the final years of life comfortably.
Long-term care insurance helps cover expenses associated with extended care for chronic health conditions. It’s different from health insurance, including Medicare, which usually doesn’t cover these costs. You might be wondering if this type of insurance is suitable for you.
This insurance can be used not only for care at home or in a facility but also for training family members and making home modifications for accessibility. You’ll be eligible for insurance benefits if you lose at least two of the six activities of daily living (ADLs) or have cognitive issues like Alzheimer’s or dementia.
Keep in mind there’s an elimination period (usually 30, 60, or 90 days) before your insurance starts covering the costs up to a daily limit. Many policies have lifetime maximums, which typically provide two to four years of care. However, unlimited policies are also available.
If you reach your policy’s limit, you’ll need to cover any additional costs yourself. That’s where high-yield savings accounts can come in handy – they allow you to set aside funds for long-term care while earning interest. So, as you plan for your future, consider whether long-term care insurance could be a valuable investment in your well-being.
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