An important aspect of estate planning is planning for your retirement years. Doing so requires you to do more than just stash as much money away as possible – though saving money certainly is important. Planning for your retirement years should also take into account the very real possibility that you, or a spouse, will need long-term care at some point. That possibility may have you considering the wisdom of purchasing a long-term care insurance policy. The Hartford Medicaid attorneys at Nirenstein, Horowitz & Associates, P.C. offer some factors to consider when deciding if long-term care insurance is right for you.
Why Would I Need Long-Term Care Insurance?
By the time you enter your retirement years, you will already stand a 50 percent chance of eventually needing some type of long-term care services. At an average annual cost of about $165,000 in Connecticut, among the highest in the nation, the cost of long-term care (LTC) could deplete your retirement nest egg in short order if you are forced to pay out of pocket – and there is a very good chance you will have to do just that if you failed to plan ahead. Neither Medicare nor most basic health insurance policies will cover LTC expenses. It is for this reason that people consider purchasing a separate long-term care insurance policy.
Understanding LTC Insurance
Long-term care insurance, as the name implies, is a separate insurance policy that specifically covers costs associated with LTC. Like other types of insurance, an LTC policy can be complicated to understand, and no two policies are exactly the same which is why you need to be clear on what the policy does cover, and what it doesn’t cover. Among the services an LTC insurance policy may cover are:
- Nursing home care
- Home health care
- Respite care
- Hospice care
- Personal care in your home
- Services in assisted living facilities
- Services in adult day care centers
- Services in other community facilities
Some common exclusions you may find in an LTC policy include:
- A mental or nervous disorder or disease, other than Alzheimer’s disease or other dementia.
- Alcohol or drug addiction.
- Illness or injury caused by an act of war.
- Treatment in a government facility or that the government has already paid for.
- Attempted suicide or intentionally self-inflicted injuries.
- Care or services outside of the United States
Is Long-Term Care Insurance Right for Me?
When deciding if a long-term care insurance policy is right for you, some factors you may wish to consider include:
- How much will LTC insurance cost you over the lifetime of the policy? Premiums increase the older you are when you take out a policy; however, even a lower annual premium will add up if you are paying that premium for 20, 30, or even 40 years before you actually use the coverage.
- Find out if the policy has a waiting period during which time the policy will not cover expenses.
- Does the policy have an annual or lifetime maximum?
- What exclusions apply? Make sure the policy does not exclude mental or nervous disorders because Alzheimer’s and other dementia diseases are often classified as such
- Will the policy cover you outside of the U.S.? If not, are you planning to remain in the U.S. when you retire?
- Does the policy terminate at a specific age or after a specific number of years?
Is Medicaid Planning a Better Option?
Paying for an LTC insurance policy can be prohibitive for many people, particularly if they wait until they are older and the premiums are high. What many people do not realize is that while Medicare won’t cover LTC expenses, Medicaid will. Medicaid eligibility can be problematic though if you failed to plan ahead. If you believe there is even the possibility that you will need to rely on Medicaid in the future, including a Medicaid planning component in your estate plan is imperative to ensure that your assets are protected and that you are eligible for Medicaid when the time comes that you need long-term care.
Contact Hartford Medicaid Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about long-term care insurance, contact the experienced Hartford Medicaid attorneys at Nirenstein, Horowitz & Associates, P.C. by calling (860) 548-1000 to schedule an appointment.
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