You’ve decided that buying a long-term care policy for yourself and your spouse is the right choice. The figures, however, are daunting and the premiums exceed your budget.
If you are considering long-term care insurance, the option to receive necessary assistance in your own home may be preferable to living in a nursing home.
Because the vast majority of the middle-aged and senior population favor this option, the insurance industry has responded. The assisted living and home health care industry is growing along with the desire to receive care in your own home.
Most long-term care insurance providers are now offering the opportunity to purchase insurance that provides coverage for community health services and home health care at much lower rates than a full-blown, long-term care policy.
Coverage and cost comparisons
For example, using the guidelines of one A-rated provider, full coverage for a 55-year-old married couple, both in good health, with a $150-per-day policy featuring inflation protection and a 30-day waiting period, would require an annual premium of about $2,600.
The same provider also offers a policy covering home health care and community care coverage for an annual premium of just under $1,000, a considerable saving over the full-coverage policy, while still offering protection for the most commonly required assistance.
While some policies will require the care to be offered by licensed providers, there are policies now available which also offer coverage for services performed by non-licensed personnel. This provides more flexibility and allows the policyholder to choose someone they trust to provide the care, such as a family friend or a neighbor.
This raises the comfort level of the care provided, since allowing strangers into their home is something of which most seniors are wary.
In order to prevent fraud or abuse of the coverage, family is excluded from providing services in most cases, unless the family member happens to be a licensed provider.
The takeaway
As the baby boomer population ages, and home health services are seeing increased effectiveness and popularity, the purchase of this type of coverage can be an affordable, attractive alternative to the more traditional long-term care insurance.
Americans Who Care for Aging Parents Suffering Financially and Emotionally
America has a senior health crisis that also produces serious employment implications. Many households have an aging family member who needs round-the-clock care, and nobody is paying the family members who voluntarily provide care and time.
The Department of Health and Human Services says that nearly 70% of people over the age of 65 will need assistance with daily tasks such as eating, bathing and toileting. In theory, this creates many caregiver jobs. However, most of these positions are filled by unpaid family members and friends, and they are often shared between several individuals.
The strain on caregivers can be extreme as it demands financial resources and time. But, with proper planning, such an issue does not have to be a major financial disruption.
The stats
The Bureau of Labor Statistics reported that more than 40 million unpaid caregivers help adults who are 65 years of age or older. That comes out to be more than 25% of the country’s workforce, and more caregivers join the ranks each year.
Several surveys have shown that people who are caregivers suffer their own health problems that are linked to the added responsibility.
In some instances, a person must quit a job to become a full-time caregiver. When this happens, the person’s spouse usually picks up the slack financially. This can strain and ruin marriages or may cut into savings or funds for a child’s college education.
Finding the right balance
While caring for an older loved one can be a rewarding and enriching experience, there is a delicate balance between helping and becoming dangerously overwhelmed.
Finding that balance is the most important part of being a truly helpful caregiver. Experts recommend providing some care at home but hiring professionals to help out.
Family members who are caregivers need emotional support, assistance with paying bills and assistance with direct care for the aging loved one. Burnout happens too often, and it negatively affects the aging adult and the caregiver.
Tasks such as changing wound dressings or catheters that require skilled nursing assistance should also be handled by qualified individuals.
Funding care
Most parents of adult children don’t want to burden their them with having to take care of them in old age. They may have their own financial issues to deal with like the expense of raising their own children and paying their mortgage.
Fortunately, there are a number of insurance products that, if purchased in advance of old age, can help foot the bill of hiring professional caregivers or renting a room in an adult care facility. These include:
- Critical illness insurance
- Long-term care insurance
- Annuity with LTC rider
- Life insurance with LTC rider
- Tax-advantaged savings accounts
Having extra income or coverage can help offset the costs of a family caregiver taking time away from work or quitting a job, or paying for a room in a skilled nursing facility, the cost of which averages about $6,000 a month in 2024, depending on your state.
To learn more about your options for insurance and financial preparation, discuss your options with us.
