As we get older, many of us will eventually need help with everyday activities.
That could mean receiving assistance at home, moving into an assisted living community, or needing care in a nursing facility.
One of the biggest misconceptions we hear is:
“Medicare will pay for long-term care.”
In most situations, it won't.
Medicare generally does not cover long-term custodial care—the ongoing help someone may need with activities such as bathing, dressing, eating, or using the bathroom.
That's why planning for long-term care can be an important part of protecting your retirement savings.
At Senior Savings Network, we can help you understand long-term care insurance and other options designed to help with these expenses.
LEARN ABOUT LONG-TERM CARE OPTIONS
Long-term care refers to services and support you may need when you can no longer perform certain everyday activities independently.
That care isn't limited to a nursing home.
Depending on your needs, long-term care may be provided:
Long-term care is often less about treating an illness and more about helping you safely live your everyday life.
Long-term care insurance is designed specifically to help pay for qualifying long-term services and support.
Depending on the policy, coverage may help pay for:
Policies vary significantly.
Most policies establish limits on how much they'll pay, how long benefits will last, and which types of care qualify for coverage.
Long-term care policies typically have specific benefit triggers that determine when you're eligible to receive benefits.
A common trigger is being unable to perform a certain number of Activities of Daily Living, often called ADLs.
These can include activities such as:
Many policies may also provide benefits for qualifying cognitive impairment.
It's common for a policy to require that you need help with at least two Activities of Daily Living or meet the policy's requirements for cognitive impairment before benefits become available.
Your policy may also have an elimination period, which is a waiting period before benefits begin.
This is an important distinction.
Medicare Is Health Insurance
Medicare helps pay for medically necessary healthcare such as:
Long-Term Care Is Different
Long-term care often involves ongoing help with everyday living rather than medical treatment.
That can include:
Medicare generally does not pay for this type of custodial care when it's the only care you need.
Medicare can cover short-term skilled nursing facility care when you meet Medicare's eligibility requirements.
Under Original Medicare, qualifying skilled nursing facility care may be covered for up to 100 days in a benefit period, subject to Medicare's rules and cost sharing.
But that's very different from paying for years of assisted living or nursing home care.
Medicare's skilled nursing benefit is designed for short-term skilled care—not ongoing custodial long-term care.
That's why you shouldn't rely on Medicare alone as your long-term care plan.
There are several ways people may pay for long-term care.
Those can include:
Medicare generally isn't the primary source of payment for ongoing long-term care.
A hybrid life insurance policy combines life insurance with benefits that may be used for qualifying long-term care.
You may also hear these called:
The basic idea is that one policy can provide protection in two different situations.
The policy may allow you to access some or all of the life insurance benefit while you're alive to help pay for qualifying long-term care expenses.
A life insurance death benefit may remain available for your beneficiaries, according to the terms of the policy.
Hybrid policies can therefore address a concern some people have with traditional long-term care insurance:
“What happens if I pay premiums for years and never need long-term care?”
With a hybrid policy, there may still be a life insurance benefit available if the long-term care benefits aren't fully used.
Often, yes.
Many hybrid policies use an accelerated death benefit.
That means you're accessing a portion of the life insurance death benefit while you're still alive.
For example, if you use part of the policy's available benefit for long-term care, the amount ultimately available to your beneficiaries may be reduced.
Some policies may also offer additional long-term care benefits beyond the original life insurance amount.
The exact structure depends on the policy.
That's why it's important to understand how the long-term care benefit, death benefit, benefit period, and other policy features work together before purchasing coverage.
Both can help address long-term care expenses, but they work differently.
Primarily designed to provide benefits if you need qualifying long-term care.
Combines a life insurance benefit with the ability to access benefits for qualifying long-term care.
Neither option is automatically better for everyone.
The right choice can depend on:
Long-term care insurance generally requires medical underwriting.
Your age and health can affect:
If you're already receiving long-term care or have certain health conditions, your options may be more limited.
Long-term care planning works best when it's done before the need for care begins.
Long-term care can be one of the largest financial risks people face in retirement.
The goal isn't simply to buy another insurance policy.
It's to have a plan for who will provide your care, where you'll receive it, and how you'll pay for it.
Senior Savings Network can help you understand the long-term care and hybrid life insurance options we offer and determine whether additional protection makes sense for your situation.
