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The Six Most Common Reasons Why People Have Long Term Care Insurance

The Six Most Common Reasons Why People Have Long Term Care Insurance

As I meet with people and make presentations to groups, I have learned there are six common reasons why they want long term care (LTC)  insurance. While the reasons vary based individual circumstances, and the reasons become combined with emotional justifications, these are the six most common reasons people rely on in making a decision to have LTC insurance as part of their long term care plan. These reasons are:

1. Protection of Assets. People work hard to build a nest egg. They have shown the dedication and effort it takes to build for their retirement and have something in their later years for themselves and their family members. They do not want to see it reduced or even disappear in order to pay for their long term care. Often a person’s most valuable asset is their home. They do not want to lose it or spend their savings and sell assets in order to pay for their care, particularly since the cost of long term care services is ever rising and care may be needed for a number of years. LTC insurance protects against this risk. For a proportionally modest premium, LTC insurance helps protect assets by paying for the cost of receiving professional long term care services.

2. Preserve Independence, Control, and Choice. By having LTC insurance, when long term care is needed, a person has the financial resources available to decide for themselves where they will receive that care, who they will receive it from, and when to change their decision based on developing circumstances. In this way, insured people are much more able to make decisions for themselves rather than have someone else make those decisions for them.

3. Avoid Being a Burden. While many people have friends or family available to help meet their needs for care services, relying on them can become problematic. It often leads to problems that were unexpected. To avoid burdening others, people want to have a plan in place that provides for their care by professional caregivers.

4. Access to Higher Quality Care. Even those who want to receive care from family members realize that there is a need to balance the care they receive from family with professional care givers. Family members simply lack the training and skill necessary to provide quality care over a longer period of time, particularly to those with chronic illness such as that caused by a stroke, heart attack, or cancer, and those with a need for supervision due to cognitive impairment caused by dementia or Alzheimer’s disease. Quite simply LTC insurance gives the care recipient the option of receiving a higher quality of care both in their home as well as in a care facility.

5. Lack of Government Benefits. While some minimal benefits for long term care services may be available from the government under Medicare, Medicaid, and Veteran’s Benefits, the qualifications are often surprisingly stringent. Indeed, the qualifications are often so restrictive that few qualify to receive benefits even when a licensed health care practitioner certifies that long term care is needed on a daily basis. As an example, for a veteran to receive benefits from the Veteran’s Administration for long term care, the requirements are normally that the medical condition must be 70% service connected. Having cancer, a stroke, heart attack, dementia or Alzheimer’s is highly unlikely to be considered 70% service connected. Apart from meeting the qualification requirements, there is the separate issue of the duration of time for which benefits can be received. Under Medicare, no one can receive Medicare benefits before age 65 except for those who qualify at an realier age due to a specified disability, and more more importantly there is a 100 day limit on receiving Medicare benefits for long term care. Qualifying for benefits under a LTC insurance policy on the other hand is far less restrictive and benefits will be paid for the duration chosen by the insured.

6. Peace of Mind. It is not surprising that one of the most compelling reasons people have for LTC insurance is the emotional security it provides. People know they they have a care plan in place. They know they have the monetary benefits available to pay for that plan. Confidence in what will occur provides the reassurance that cannot be obtained elsewhere.