Why You Need Long Term Care or Nursing Home Insurance

There are several reasons why it is so important to have long term care coverage. Close to 70% of individuals reach age 65 will require some type of living assistance in their lifetime. The average stay in a nursing home is 904 days, almost two and a half years. You can expect to pay close to $200,000 based on 2010 statistics. What would a bill like this do to your assets? 50 percent of all couples and about 7 of 10 single persons lose all their assets within one year of entering a long term care facility.



There are only three ways to pay for your time in a long term care facility: The money can come from Medicaid, your investments or other assets, or Nursing home insurance coverage. For individuals with minimal assets, Medicaid pays for time in a nursing home. In most parts of the country 50% to 65% of nursing home residents are medicare recipients. It is probably not coincidental that nursing homes funded primarily by Medicaid (which offers a very low reimbursement rate) generally offer a lower standard of care when compared to other nursing homes.



It should be noted that Medicare supplement does not pay for assisted living costs. These policies only pay for a limited amount of skilled nursing care after a qualified hospitalization. This is for skilled care only and most nursing home care is custodial. 75% of these expenses (as opposed to custodial nursing home expenses) are paid by the family, out of pocket.



Few people can pay for nursing home and/or assisted living care, and still leave enough for a surviving spouse's living costs and possibly their need for long term care.



As the average retirement "nest egg" is slightly under $350,000, very few families can afford the cost of even one spouse receiving a typical stay in a nursing home, let alone two. In many cases one spouse becomes ill and needs to go to a nursing home. This can result in leaving the remaining spouse in poverty.



Many experts recognize the need for Long Term Care insurance coverage for estate preservation for the longest period of time.



Yes, there are some people who will never use Long Term Care insurance – approximately 30%. Even so, the average long-term care insurance plan purchased by a 65-year-old and held until death pays out 82 cents for every dollar of put into the policy. This protects the other spouse.



Because Long Term Care policies are not standardized and there are such a wide variety of options available for coverage, it is a good idea to get as much information about these policies before buying one. An experienced broker will know which coverages each insured needs, and customize their advice to best fit each situation. A local, independent, experienced agent is the best resource to compare policies, coverage, and endorsements. Your broker can make sure the policy you purchase is the optimal policy for you and your family.

The author recommends that you get prices and additional information about insurance for nursing home care and cheap medigap insurance" on his site. Alston J. Balkcom is a veteran insurance professional with over 25 years of experience as a licensed agent.