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LONG TERM CARE INSURANCE
By the year 2030, nearly one in five people - almost 70 million - will be over 65. With statistics show that the risk of spending 2 or more years in a nursing home is one in three, it is no wonder that an increasing amount of people are purchasing long-term care insurance.
Introduced 25 years ago, long-term care insurance was designed as nursing home insurance, with no coverage for alternative care. Most policies became effective only after the patient spent 3 days in the hospital, and no provision for long term illnesses such as Alzheimer's were provided.
Modern policies, however, now provide benefits for skilled, intermediate and/or custodial care.
Skilled care is usually prescribed by a doctor and provided by a registered nurse, and encompases 24 hours of a day. Intermediate care means occasional nursing or rehabilitative care. Custodial care involves assistance with activities for daily living (ADLs) such as bathing or eating that can be administered by someone without professional medical skills, and is usually rendered in a residential care home, or in the individual's home.
Benefits from long-term care insurance are usually triggered by the loss of two ADLs, or cognitive awareness. This is where the details of your policy come in. Some policies count bathing and dressing as two separate ADLs, while others combine them into a single ADL - and will not pay benefits until the ability to perform a third ADL is lost.
Important features to look for in long-term care policies include:
- coverage for skilled, intermediate and custodial care
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home care
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low ADLs
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no prior hospitalization requirement
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inflation protection
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waiver of premium
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guarantee of renewability
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coverage for Alzheimers
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