Long-term care is simply defined as any care, medical or non-medical, that lasts more than 3 months irrespective of where it’s given. It costs between $20,000 to $100,000 annually and could quickly drain your life’s savings if you aren’t on any insurance.

It’s not included in most insurance coverage which leaves you with the option of shopping for it separately.

It may be a bad idea if the long-term care insurance you settled for has a monthly premium that’s more than 5% of your monthly income.

In this article, we’ll take a look at how much long-term care insurance by age, in 2022, how it works, if it’s really worth it, how to pay for it, and so much more.

Is long-term care insurance worth it?

According to the United States Department of Health and Human Services (DHHS), long-term insurance usually covers chronic health problems and disabilities that prevent you from carrying out certain important activities of daily living.

It has been estimated that 70% of elderly people will need long-term care at one point in their lifetime. This costs a fortune, so much so that it could quickly drain your life savings without insurance, even if you had a considerable amount saved up for retirement.

To prevent bankruptcy getting insured might be the way to go, especially if you are anticipating the possibility of needing long-term care as you age based on your personal medical, or family history.

For 65-year-old women and men, the table below shows their probability of needing long-term care as they age this year, 2022.

From the table, you’ll find your chances of needing long-term care more than double by the age of 75. From that point, it increases rapidly such that by the age of 90 years nearly 60% of all women and just more than half of all men could be under long-term care.

You’ll find out also that though women tend to live longer than men, they have higher chances of needing long-term care when compared to men.
That, women live longer than men and with higher chances of making insurance claims, are contributing factors to why they pay higher premiums Share on X

What falls under long-term care?

As mentioned earlier, long-term care refers to any essential medical or non-medical care given for longer than 3 months. This is often centered around helping people who may have lost the ability to carry out any two or more activities of daily living such as:

1. Bathing and washing
2. Dressing and undressing,
3. Making use of the lavatory,
4. Eating,
5. Transfers like moving from bed to chair and back to bed,
6. Having incontinence like urinary or fecal.

Long-term care may also involve other domestic assistance like shopping, housekeeping, and any other help the patient needs as these are also part of the normal activities the patient would’ve been able to perform if not for poor health.

How long-term care insurance works.

After approval, you start paying premiums. Certain policies apply for most long-term health care insurance companies such as:

1. The younger you are and by extension, the healthier you are, the less your premium. On the flip side, the older you are or the less healthy, the more your premium.

2. Your eligibility for benefits begins at the point you lose the ability to independently carry out at least 2 of the activities of daily living (ADL), or suffer from cognitive impairments.

3. The plan of your care must be first approved by the insurance company for you to stand any chance of getting your claim approved.

4. After making your claim the company may send a health expert to assess you but more importantly, review your medical records as part of the protocols for approval.

5. There is an elimination period during which you’ll have to pay for your care for as long as 1 to 3 months, in some cases, for your reimbursement to kick in.

6. There is usually a daily limit that can be paid and run till it reaches your lifetime maximum.

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Types of long-term care facilities.

There are principally four places where long-term health care can be received. Where you end up will usually depend on the level of care you need. It could either be:

1. At a nursing home.
2. Your residence.
3. Assisted living communities.
4. An adult daycare center or retirement community.

Usually, a nursing home serves to get you fit enough to return home, where possible, following a discharge from the hospital. Your long-term care may continue at home if necessary.

How much for long-term care insurance by age in 2022?

Those insurance companies happen to be composed of profit-oriented, astute businessmen and women. In ensuring the profitability of their business they put a couple of factors into consideration when determining the cost of your long-term health care insurance premium. These include:

Health: The healthier you are the less the premium as you are considered less likely to make a claim. If you are already sick at the time of application you stand a chance of getting turned down. It’s always better you apply while you are still strong and in good health.

The extent of coverage: Generally, the more items on your list of coverage, the more premium you’ll have to pay. This also includes paying more for favorable adjustments in your plan such as shorter elimination periods, higher daily limits and lifetime maximums, etc.

The insurance company: There is no uniformity across the board for the same amount of coverage. Each carrier charges as it deems fit. This is precisely the reason why making comparisons is expedient before deciding where to pitch your tent.

Relationship status: If married, you get to pay less in premium when you apply as a couple than on an individual basis. In the table below you can see the amount of premium being paid in 2022 when the application is made as couples are considerably less than the total amount charged had they applied as individuals.

Sex: Women are not only known to outlive their male counterparts on average but are also known to be more likely to need long-term insurance and make claims. For this reason, they pay higher premiums as shown in the table for 2022 premiums, below.

Age: The older you are, the more your premium. This is because older people are more likely to make claims. In fact, it gets to a point your application could be turned down especially if you are over 75 years old. Applying by the age of 55 years while still in good health may come as a good decision for some people.

Below is a table of your long-term care insurance premium at $165,000 policy benefits for the year, 2022, based on age.

From the table you’ll find:

1. Women pay higher health insurance premiums than men at any attainable age level.

2. The premiums increase as you age.

3. You pay significantly less when you register as a couple rather than as an individual.

Most people with long-term care insurance plan to buy in their mid-50s and 60s. The long-term care insurance carriers will decline the applications of most people who have gone beyond the age of 75 years.

The out-of-pocket cost of long-term care insurance.

This depends on several factors like the care provider, place of residence, type of care, place of care, and for how long. There is no fixed amount and it varies widely across the board. Most could range from $50,000 to $100,000 annually.

Care in a nursing home could cost about $7,756 to $8,821 monthly depending on the level of privacy, and care provided in an assisted living facility could cost you $4,300 while long-term care at home costs $4,576 according to Genworth. These figures usually increase annually.

Generally, the average lifetime cost of long-term care is up to $172, 000 according to the consumer news and business channel(CNBC).

How to pay for long-term health care.

Options available to you are:

1. Long-term health care insurance is discussed here.
2. Annuities with provisions for long-term care.
3. Home Equity or reverse mortgage.
4. Personal savings.
5. Medicaid or Medicare. These usually don’t cover long-term care except in some instances. Concerning Medicare, long-term health care insurance is usually for a limited period of about 100 days.

How much long-term care insurance should you buy?

This varies so much from place to place but a starting point is finding out the average cost of care where you’ll be resident at the time you may need it. With it, you can calculate the daily benefit you’ll need by subtracting that average from your daily income.

Determine the length of time the policy will cover and work with that. While the minimum is 2 years, the average length of time people usually have long-term care is 3 years and most people don’t need long-term care beyond 5 years.

According to the administration of community living, only 20%(one-fifth) of 65-year-olds will need long-term care beyond 5 years but a 3rd will never need any form of long-term health care.

The longer the time the more health insurance premium you’ll have to pay. With prolonged medical conditions, you could qualify for Medicaid if you exhaust your benefits. There are partnership programs that allow you to switch to Medicaid without exhausting your assets.

Top long-term care insurance companies for 2022.

According to the American Association of Long-term Care Insurance Statistics for 2022, these 10 long-term healthcare insurers top the list of carriers with a total market share of over 78% as shown in the table below.

It appears that the more feathers an insurer has up its sleeves the higher its prices. Nonetheless, comparing prices for the same amount of coverage, and consulting with unbiased experts is a good step.

I hope this was helpful. You may also want to find out how to get health insurance.