Long Term Care Insurance for Seniors

Last updated on December 3rd, 2020 at 09:59 am

Long Term Care insurance coverage is a great option to pay for home-health or nursing home expenses, especially when you’re not rich enough to bankroll this type of care from out of pocket. With long term care insurance, you pay premiums to an insurance company to get protection against the usually devastating costs of long term care insurance. And why would anyone need to insure against this form of insurance?

Available data on long term care for seniors

Existing federal data suggests that nearly half of all Americans who hit the age of 65 will need long term care at one point or the other. 7% of these will spend over $100,000 on LTC, and about 15% will spend over $250,000. Unless you are significantly wealthy, these costs can deal your savings a serious blow. But it’s unfortunate that millions of Americans are still paying for long term care out of pocket.

Currently, about 10 million Americans are in need of long term care support. This number is projected to go up to 15 million by 2020.

A John Hancock study on national LTC costs shows that a private room at a nursing home goes for $94,000 per year. Annual stay at an assisted living facility goes for $41,000, in-home care costs $29,000, while adult day care costs around $18,000 per year. This does not include extra fees such as transport and additional services. The one thing certain with this figures is that LTC expensive. All the same a key reason why seniors need to purchase long term care insurance. This kind of coverage pays for a senior’s stay at an assisted living facility, a nursing home, in-home care, adult day care, etc.

Cost of premiums

How much your pay for long term care for seniors depends on the insurer you’re dealing with, as well as the specific provisions of the policy you want to buy. Data from the American Association for LTC Insurance suggests that a 55-year old American male would expect to pay around $925 per year to get $164,000 in long term care benefits. He’d pay $1,765 per year so that their benefits shoot up to $365,000 by the time they hit 85 years.  Over the years, premiums on long term care insurance have doubled as more people seek to protect their savings from potential devastation.

Hybrid long term care insurance for seniors

Hybrid LTC happens to be a powerful, new trend. A large section of people who purchase traditional LTC coverage are concerned that they might never use their benefits. To counter this concern, insurers have introduced hybrid LTCi policies. Basically hybrid plans incorporate both life insurance and LTC in one. You are required to pay a single lump sum premium or fixed premium amounts over a number of years. If long term care kicks in, the policy pays up. However, if you never need this form of care, your beneficiaries will be awarded a death benefit upon your death. This way, it’s win-win for policyholders.

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