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How to Invest and Save Money

How to Invest and Save Money

Britt Erica Tunick is an award winning financial journalist who has spent the past 17 years writing about virtually every aspect of finance. She has mastered the art of boiling down complicated financial topics for readers to understand.

What You Should Know About Long-Term Care Insurance

What You Should Know About Long-Term Care Insurance

By Britt Erica Tunick

Americans are living longer than any other point in history. While that’s great news, it also increases the likelihood that at some point in your life you will have to deal with some sort of serious illness or disease. Given this unfortunate reality, something you should give serious consideration to before reaching retirement age is purchasing long-term health care insurance. But before you run out and invest in long-term coverage, make sure to consider what is excluded from any policy you are considering.

While many individuals continue to maintain extremely active lives far into their old age, the reality is that there are just certain illnesses and diseases that older individuals are more likely to find themselves facing –such as Alzheimer’s disease and dementia. According to Alzheimer’s Association, an estimated 5.5 million Americans are currently suffering from Alzheimer’s, 5.3 million of whom are 65 or older. Many long-term care insurance policies exclude coverage of Alzheimer’s and dementia, among other things.

According to data from Morgan Stanley, the costs of long-term care for an individual in a private room in a nursing home currently average $105,645 for just one year of care, and those costs are predicted to soar to $352,672 per year within the next three decades. Though Medicare will cover a small portion of such costs, it excludes most long-term care services and anything that is covered is usually limited to a short period –usually a maximum of 100 days for limited coverage. That’s where long-term care comes in, which exists to supplement what Medicare won’t cover. Nonetheless, even long-term care coverage is not all encompassing.

Most long-term care policies cover a combination of health care, assisted living, nursing home care and adult day care; and some include more serious care such as hospice or even training for care by a family member. But the amount of coverage between policies can vary significantly and coverage is typically limited for pre-existing conditions and mental health issues. Conditions related to drug addiction and alcoholism also tend to be excluded in many long-term care policies.

Given the variance between what long-term care policies cover, it should go without saying that you will want to consider more than one plan and take the time to compare a few plans against one another. Beyond what conditions may or may not be excluded, another thing to look into when comparing long-term care policies is what the period of coverage is and when benefits will be paid.


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