Long-Term Care Insurance

August 04, 2010, By Steve Thompson 0 comments

Watching your parents get older is an unpleasant fact of life, especially if they are experiencing medical difficulties, such as Alzheimer's or Parkinson's disease. Long-term care insurance does not settle the emotional weight you feel watching your parents' health decline, but it does relieve some of the financial burden.

The purpose of long-term care insurance is to provide for people who are unable to perform certain activities of daily living (ADL). If your parents or elderly relatives are unable to feed themselves, walk short distances, manage their finances, dress, cook or administer their own medications, they may be candidates for this type of insurance coverage.

What is Long-Term Care Insurance?

Long-term care insurance pays for the care of those who cannot care for themselves. Some people who take advantage of this insurance live in hospices or assisted living facilities, while others live at home. It can cover adult daycare programs as well as at-home assistance.

Medicare and health insurance policies do not always pay for these things; it is possible to spend tens of thousands of dollars per year on care for the elderly. If you don't have a bankroll sufficient to cover your parents' expenses, long-term care insurance may be the best option.

How do You Qualify?

To receive long-term care insurance benefits, you will need to be able to demonstrate that the recipient of those benefits is unable to perform one or more activities of daily living. Some policies require that the patient exhibit an inability to perform only one of those, while others require two or more deficiencies.

This type of insurance is different from Medicare coverage or traditional health insurance because it does not require a specific diagnosis or age bracket, only the inability to perform activities of daily living. Even if your parents do not yet qualify as elderly, and even if they do not suffer from a particular malady, they can still qualify for benefits.

Furthermore, long-term care insurance cannot be yanked out from under the beneficiary because of a medical diagnosis. In most cases, policies are only canceled in the event of nonpayment; otherwise, the recipient is covered for life. This is an enormous relief for adult children who want to ensure their parents receive the best care possible.

When Should You Buy?

Like any insurance policy, long-term care insurance requires the payment of a monthly premium, which can be substantial. You should only buy if you have the financial means to do so. However, the purpose of long-term care insurance is to protect yourself and your parents from extraordinary expense. Around-the-clock care can significantly deplete your financial resources.

Before purchasing long-term care insurance, meet with an attorney or financial adviser who can help you make this important decision. Bring as much information to the table as possible, including your parents' current health status and your financial situation. This is not an insurance product to purchase with no thought to the consequences.

Assessing Your Needs

Can you afford to take over the care of your parents when they need you most? Do you have the time to attend to their every need once they cannot take care of themselves? Do you have the room in your home to take them in?

These are not pleasant questions, but they do require answers as your parents age. Retirement income is not usually sufficient to provide long-term care; insurance could remove the burden from your shoulders.