Long Term Care Insurance

What is long term care insurance?

Long Term Care Insurance policies provide you with payments to cover the cost of caring for chronic illnesses of incapacity.

Long Term Care Insurance concentrates not on medical costs (although this may be included, depending on the package) but on providing all the care that somebody might need when suffering from an ongoing illness. This could include care at home, the costs of entering a nursing home, or much other help.

They may be included as part of a comprehensive medical insurance policy, but they are also commonly bought by individuals. Some people buy Long Term Care Insurance for themselves, but it is also common for children to buy it for their parents.

Is it just for the elderly?

The general image of Long Term Care is that it is something you will need when you become an octogenarian, but until that point it isn't relevant. Not true. Yes, the majority of those needing Long Term Care are elderly, but there are also many thousands of young and middle-aged citizens who are temporarily or permanently unable to care for themselves, and need help.

Long Term Care Insurance is particularly useful for these younger people, the ones who might not have predicted that they will need care. The costs of Long Term Care Insurance are very low for younger people, reflecting the lower likelihood that they will need to use it. The price is lower, but the benefit in peace of mind is equally high.

Long term care insurance and the family

When you're evaluating Long Term Care Insurance, you need to think about it in the context of changing American family structures, and the difficult strains that can put on family members when somebody falls ill.

Stereotype has it that 'back in the good old days' everybody lived in an extended family, large enough that there was always somebody to look after the elderly and infirm. People would live in close-knit communities, with neighbors and the church always available to help with the long-term care.

Needless to say, things were never really like that. America's history has been littered with abandoned relatives, villages unable to look after their sick, and people shirking their responsibilities.

Still, there's enough truth in the stereotype: in the past, many people could hope to be cared for by their families. Now, they can't. The nuclear family of the late 20th century, let alone the fragmented, divorce-ridden family of the present day (can we call it a 'post-modern' family?) is too busy, too geographically diverse, too organizationally and emotionally overcommited to look after its seniors in this old way.

Bringing up Daddy

That's why they need to look after their seniors in a new way. Long-term care insurance is the answer to this problem. It allows concerned children to care for their parents without having to sacrifice their own ambitions and lifestyles to look after them in the family home.

Better still, it removes the unpredictability of not knowing whether you will be expected to provide for your parents. You can budget a sensible amount of your income to pay for long-term care insurance for your parents, knowing that it will provide for their needs no matter what the circumstances.

Since the cost of long-term care for seniors can be enormous (whether that cost is paid in dollars or in time), being able to budget in advance like this is a great advantage. It allows children to incorporate the cost into their long-term plans. If, for instance, the children are planning a family of their own, they can do so without the worry that their parents will fall ill just as they become grandparents, and that the generation in between will be stretched thin, trying to care both for the young and for the old.

The costs of long term care insurance

On the surface, Long Term Care Insurance can appear to be a very expensive form of insurance. The reason for this is that it is very likely that a policyholder willneed long-term care at some point during their life. The premiums are high because insurers will need to pay out in a large number of cases - the same principle as lies behind hte high cost of general health insurance.

The long and short of it is, Long Term Care is expensive. A year in a nursing home can cost upwards of $50,000. You can either pay this unpredictably, waiting until you need the care before finding the money. Or you can make the costs predictable, despite the inherent unpredictability of how much care you will need, by investing in Long Term Care Insurance.

It's hardly surprising that long-term care insurance is such a growing field - it makes sense for all concerned, and fits into the family structures of the modern world.