Long-term care insurance is a type of coverage that you can purchase to help with expenses that you may incur if you ever need help with your activities of daily living.
When you first hear about it, you may feel as though you don’t need long-term care insurance, because you will qualify for Medicare as a senior citizen. Let’s look at the facts.
Coverage Gap
You obtain Medicare eligibility through the accumulation of retirement credits. These credits are earned while you are working and paying self-employment or FICA taxes. It is possible to accumulate up to four credits per year, and most workers do, because the requirements are modest.
At the present time, the age of Medicare eligibility age is 65. If you have at least 40 retirement credits when you reach this age, you will qualify for Medicare coverage.
Though the program will provide an underpinning, there are out-of-pocket expenses to contend with, and you should budget for these costs when you are looking ahead toward the future.
These out-of-pocket expenses for things that are covered are manageable for most people, but there are some very significant expenses looming that are not easily absorbed. The Medicare program does not pay for long-term care at all.
If you reside in a nursing home or assisted living community at some point in time, you would be receiving custodial care, and Medicare does not cover this type of care. Most seniors will eventually need long-term care, and it can potentially cost you over $100,000 to spend a year in a nursing home.
Long-Term Care Insurance
Now that you understand the lay of the land when it comes to Medicare and assisted-living costs, you can see why long-term care insurance may be relevant to you at some point in time. You could take out a long-term care insurance policy, and the company would help you pay for living assistance if and when you do in fact require long-term care.
The cost of the long-term care insurance will depend on a number of factors, including your age and the extent of the coverage that you will receive. You should do your homework and do some comparative shopping. Read the fine print so that you know exactly what each respective company is offering.
Legal Guidance
Before you enter into any legally binding agreement, you would do well to review the documents with the assistance of a licensed elder law attorney. Your attorney will provide you with guidance, and you can ultimately go forward with confidence when you know that you are acting in a fully informed manner.
If you consult with an elder law attorney when you are considering long-term care expenses, you will discover that Medicaid is a government program that does pay for long-term care. Long-term care insurance may not be necessary if you take steps that lead to Medicaid eligibility.
Schedule a Consultation
Our firm would be glad to help if you are ready to take action. We offer no obligation consultations, and you can contact us through this page to set up an appointment: Indianapolis IN Elder Care Attorneys.
Paul A. Kraft, Estate Planning Attorney
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
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