Exploring Long-Term Care Insurance for Elders

CNBC reports that around 11,200 Americans will celebrate their 65th birthday each day from 2024 through 2027.

Reaching the age of 65 is undoubtedly a milestone and a cause for celebration, but it should also serve as a reminder that as people age, their chances of requiring long-term services and support (LTSS) increase. Unfortunately, LTSS can be expensive and quickly drain older people's finances and that of their family members who care for them.

The good news is that several options exist to provide financial help for seniors who need LTSS, including long-term care insurance (LTCI).

In this guide, the caring team at Prairie Hills Cedar Rapids, our assisted living community in Cedar Rapids, Iowa, will share insights on this type of elder care insurance policy. Read on to discover what it is and the financial benefits it can bring to seniors and their families.

What Is Long-Term Care Insurance?

Long-term care insurance, also called "senior care insurance," is a special coverage that helps pay for elder care services or LTSS. The exact terms of the inclusions vary from one policy to another but most typically help pay for the costs of:

Assisted living care and services
In-home care
Skilled nursing care

Assisted Living Care and Services

According to a CNN article, over half of Americans will need long-term care at some point in their senior years. Many older adults will likely require assistance with activities of daily living (ADLs).

ADLs are the day-to-day activities people need to perform to stay alive and healthy. They include:

Bathing or showering
Moving or ambulating
Personal grooming and hygiene
Selecting the right clothes and putting them on
Preparing meals and feeding oneself
Continence care
Medication management

Older adults can get the help they need with their ADLs by transitioning to assisted living. An assisted living community's top priority is providing long-term care benefits, such as tailored personal care and support for those who need an extra helping hand.

Luckily, long-term care insurance policies provide assisted living coverage.

In-Home Care

Many Americans dream of growing old in their own homes. Indeed, according to USA Today, a recent survey found that three in four respondents want to age and stay at home for as long as possible. In-home care services can help make this a reality.

Like assisted living communities, in-home care services are for older adults who need help with ADLs. However, seniors who elect for in-home care will receive the services and support they require at home rather than in a senior living community.

In-home care isn't always the best or most affordable option. Depending on the level of services and hours of care required, it can be more expensive than assisted living.

Skilled Nursing Care

Skilled nursing care services are for older adults who need 24/7 supervision from trained healthcare professionals. In many cases, seniors requiring such services can no longer perform most ADLs independently.

Skilled nursing care can either be at home or provided in nursing homes. Either way, long-term care insurance can help cover some of the costs that older adults may incur for requiring these elderly support options and services.

Why Purchase Long-Term Care Insurance?

Purchasing long-term elder care insurance is a vital strategy for effective senior financial planning for the following reasons:

Make long-term care services more affordable
Regular health insurance limitations
Have more care options

Make Long-Term Care Services More Affordable

According to Genworth, the following are the median costs for long-term care services in the U.S. in 2023:

$9,733 for a private room in a nursing home
$8,669 for a semi-private room in a nursing home
$5,350 for assisted living costs
$6,292 for in-home health aides

All those figures show how costly long-term care services can be and how they can quickly drain seniors' finances, as they may no longer earn regular income. Long-term care insurance can help, covering a significant portion of these costs and protecting older adults' retirement savings.

Regular Health Insurance Limitations

Conventional health insurance policies for seniors often don't cover long-term care. So, if you or your older loved one will need these services in the future and you have no long-term care insurance, you'd have to pay for them out-of-pocket.

Have More Care Options

With long-term care insurance, you or your older loved one can have more care options. It can help cover more private senior care costs, including the tailored personal care and support provided by high-quality assisted living communities, such as Prairie Hills Cedar Rapids.

When Is the Best Time to Purchase Long-Term Care Insurance?

The American Association for Long-Term Care Insurance (AALTCI) recommends starting planning for long-term care between the ages of 52 and 64. You may think this is too early, especially if you or your older loved one is still in good health today.

However, holding out too long or purchasing a long-term care insurance policy only once the need for long-term care arises can result in higher premiums. In some cases, insurance companies may even reject the application.

As the same AALTCI article pointed out, long-term care insurance becomes more expensive the older an applicant is. One primary reason is that the older a person is, the sooner and more likely they are to file a claim.

So, the earlier you or your older loved one buys long-term care insurance, the more you can save in the long run. It's best not to put it off, as doing so may put you at risk of higher premiums, such as if your health diminishes in the coming years.

Consider Purchasing Long-Term Care Insurance Soon

Long-term care insurance can help protect seniors' nest eggs, considering how long-term care services cost a lot. For this reason, purchasing it sooner rather than later is best, as doing so can also help you avoid paying higher premiums.

If you or an aging parent or loved one is considering transitioning to a senior living community in Cedar Rapids, Iowa, we invite you to visit Prairie Hills Cedar Rapids. Our assisted living community provides exceptional personalized care and support to our aging residents. Here, they can enjoy high-quality and maintenance-free living with the help of our highly trained care professionals, who are available 24/7.