Introduction to Long Term Care

When most people think of long term care, they think of nursing homes. But long term care goes far beyond nursing home care. Long term care can range from assistance in performing the basic activities of daily living to highly skilled medical care.

LONG TERM CARE SERVICES INCLUDE:

Nursing Home Care
Care in Assisted Living Facilities
Home Based Care
Adult Day Care
Respite Services for caregivers who require time off

A good long term care insurance policy will cover all of the above services, and have many more features as well.

The cost of long term health care can be staggering. Here is a representative sample of costs for local nursing homes. Just a one year stay could put a serious dent in one's retirement nest egg. So what's the solution? There are three basic ways to prepare for the potential costs of long term care.

The first is to set aside assets and savings to utilize for potential long term care expenses. The problem with this method is the sheer magnitude of the costs. Even a moderately short stay could require all of the savings that took many years to accumulate.

The second way is to qualify for Medicaid, a welfare program administered by the individual states. This is not a viable alternative for those in the upper middle class. New Jersey Medicaid has very low income and asset thresholds, so unless you are extremely poor, you will not qualify for benefits. And contrary to the belief of many, Medicare , which is a federally administered insurance program, does not pay for custodial care.

So that leaves the third way, which is to purchase a long term care insurance policy. While not inexpensive, it is usually the best alternative for upper middle class individuals and couples. The latest generation of LTC policies can be customized to fit most needs and budgets.

One thing to keep in mind with regards to LTC insurance policies is that the premiums are not guaranteed, i.e., the insurance companies reserve the right to increase premiums in the future. While they cannot increase the premium on just your policy, they may increase premiums on all policies that fall within a certain class of policies.

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