Long Term Care Insurance

What is Long Term Care?

Individuals need long-term care when a chronic condition, trauma, or illness limits their ability to carry out basic self-care tasks, called activities of daily living (ADLs), (such as bathing, dressing or eating), or instrumental activities of daily living (IADLs) (such as household chores, meal preparation, or managing money). Long-term care often involves the most intimate aspects of people’s lives:  what and when they eat, personal hygiene, getting dressed, using the bathroom. Other less severe long-term care needs may involve household tasks such as preparing meals or using the telephone.

Long term care services may be provided by a health care professional (a nurse, for example), a home health aide, or other personal care providers, like family members and personal care attendants.

Long term care insurance can pay for varying levels of care in a variety of locations, ranging from a few hours of care per week at home to round-the-clock care in a nursing home.

Who Needs Long Term Care?

• An estimated 10 million Americans needed long-term care in 2000.¹Most but not all persons in need of long-term care are elderly. Approximately 63% are persons aged 65 and older (6.3 million); the remaining 37% are 64 years of age and younger (3.7 million).²
• The lifetime probability of becoming disabled in at least two activities of daily living or of being cognitively impaired is 68% for people age 65 and older.³
• By 2050, the number of individuals using paid long-term care services in any setting (e.g., at home, residential care such as assisted living, or skilled nursing facilities) will likely double from the 13 million using services in 2000, to 27 million people. This estimate is influenced by growth in the population of older people in need of care.⁴ Of the older population with long-term care needs in the community, about 30% (1.5 million persons) have substantial long-term care needs (three or more ADL limitations).
• Of these, about 25% are 85 and older and 70% report they are in fair to poor health.⁵

The Problem: Long Term Care can be Expensive

In 2008 the average annual rate for a private nursing home room is $76,460 - up 17% since 2004. The demand and costs for in-home care are on the rise. And, we face an impending caregiver shortage that could drive costs even higher.

The Solution:  Long Term Care Insurance

The purchase of Long Term Care insurance is a serious decision, with significant financial implications for you and your beneficiaries. That is why it is always a good idea to use a professional insurance agent when purchasing Long Term Care insurance. The best choice is an insurance agent that has earned the professional designation, Chartered Life Underwriter.

Other Resources

• American Association for Long Term Care Insurance
• Congressional Budget Office - Financing Long Term Care
• Medicare.gov
• National Long Term Care Ombudsman Resource Center
• U.S. Department of Health and Human Services
• Long-Term Care Insurance Tax Incentives Offered by States, 2008
• Supercentenarians

Notes

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