Due to longer life expectancies, more people these days are considering whether they should purchase long-term care insurance. If your aging parents are very wealthy, they do not need to buy this kind of protection, and if they are on the opposite end of the income scale, they will probably find it unaffordable. For those in between, long-term care may be an option. However, in making helping your parents make a decision, there are certain pitfalls you should be aware of as well as some alternatives that may prove to be a better fit.
How to qualify
Your parents will qualify for long-term care insurance benefits if they cannot perform normal daily activities, such as eating, bathing, dressing or using the toilet. However, the rules are strict. For example, if your parents cannot walk around the block but they can still walk inside their home, they will not qualify.
Nursing home or home health care
Be sure to read every part of any policy your parents are considering. You will find that long-term care insurance usually pays a portion of the cost of either home health care or nursing home care. While your parents’ policy may cover facility charges and the costs for skilled nursing care, coverage is not provided for prescription drugs or medical supplies. Some policies cover skilled nursing care only and may not pay for any facility other than a Medicare-certified nursing home.
The alternatives to long-term insurance
Because of the extremely high costs of long-term health care, hybrid policies are becoming popular. One such policy blends life insurance and long-term care insurance. If your parents never use it, their heirs will receive a payment from the insurance company upon their death. Purchasing an annuity with a long-term care rider is another option, whereby your parents purchase the annuity but do not take withdrawals. Rather, the money is set aside for long-term care.
Seek planning help
If you or your parents are contemplating health care matters that might arise down the road, determining what to do about long-term care would be a good discussion topic relative to any retirement-planning strategy. An experienced attorney can answer your questions and help you choose the best option for your parents’ particular circumstances.