Purchasing LTCI
Long Term Care Insurance
by Bill Baker, J.D.
It is best to figure out how you are going to pay for your long term care long before you require long term care. When it comes to long term care, it is quite literally all about the money. Make no mistake about it, if you don’t have the money to pay for your long term care you will quite literally be in a place, both physically and metaphorically, you might not want to be.
The best place to start is by determining approximately how much money you will need to cover your long term care and what financial resources you have to cover your long term care costs also taking into consideration your other financial responsibilities and cost of living increases. The most recent online (2009) U.S. average cost numbers available from the U.S. Department of Health and Human Services National Clearinghouse for Long-Term Care Information are:
- $198/day for a semi-private room in a nursing home
- $219/day for a private room in a nursing home
- $3,131/month for care in an Assisted Living Facility (for a one-bedroom unit)
- $21/hour for a Home Health Aide
- $19/hour for a Homemaker services
- $67/day for care in an Adult Day Health Care Center
For California, the numbers are generally higher. It is fair to say that these costs have probably gone up since 2009 and may continue to increase into the foreseeable future.
Your choices for funding your long term care needs are:
1). Self insurance, using the cash and assets available to you before or without insurance.
2). Purchase long term care insurance (LTCI).
3). Purchase an annuity with long term care benefits.
4). Purchase a life insurance policy with long term care benefits.
Long Term Care Insurance is designed to deal with chronic care as opposed to medical insurance that deals with acute care. According to the University of Cincinnati Academic Health Care Center:
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