The Basics of Long-Term Care Insurance, Ep #42

<p>What is long-term care insurance? Who needs it? How many types are there? How does it work? In this episode of Retirement Made Easy, I want to give you the information you need so YOU can determine whether it’s a good fit for you now or in the future. If long-term care is something you’ve been worried about, don’t miss this episode! </p> <h2>You will want to hear this episode if you are interested in...</h2> <ul> <li>[2:20] Is long-term care insurance necessary? </li> <li>[3:51] Option #1 for long-term care insurance</li> <li>[8:56] The 6 activities of daily living</li> <li>[10:37] The big mistake that many people make</li> <li>[12:53] Option #2 for long-term care insurance</li> <li>[14:45] A surprising fact about long-term care insurance</li> <li>[16:27] Some employers offer group long-term policies</li> </ul> <h2>Option #1 for long-term care insurance</h2> <p>The first type of long-term care insurance available—that you must medically qualify for—is similar to life insurance. You pay a monthly or annual premium and once you need care, you start receiving the benefits of the policy. But what if you never use the care you’ve paid for all these years? </p> <p>Let’s say someone at age 60 buys the policy and it costs them $3,000 a year. They pay it for the next 20 years for a total of $60,000 total. If they die of natural causes without needing the care, the insurance company keeps the premiums and the policy is null and void. <em>That’s a lot of wasted money.</em></p> <p>If this person’s health went downhill and they needed care, they can put a claim on their policy. The average policy will pay up to $5,000 per month for nursing care or assisted living. The benefits are also tax-free.</p> <h2>The six activities of daily living</h2> <p>Most long-term care policies have requirements you must meet to start receiving benefits, usually based on being <em>unable</em> to complete at least two of the six activities of daily living. What are they? Bathing, dressing, eating, transferring, toileting, and continence. </p> <