Long-term health care requires comprehensive financial planning and preparing. Before you get overwhelmed, here is some helpful information to help you understand your options.
There are nine common methods to acquire money for long-term care. Some are widely available, while others have strict eligibility requirements. Read through these options, and then decide what combination of sources will provide the most benefits to you or your loved one.
Long Term Care Insurance: Depending on the policy benefits, this can provide a high level of coverage. It can also get expensive; it is recommended that insurance holders have an annual retirement income of at least $25,000. The earlier you enroll, the better, as you’ll get lower premiums and may not have health conditions that can disqualify you.
Reverse Mortgages: This is a loan that gives you money for the equity built up in your home. The payments are tax-free and do not have to be repaid until you move or die, in which case, heirs can sell or refinance the property.
Medicaid: Medicaid can cover long term care if you meet specific financial requirements, in which nearly all personal assets are exhausted. It also only covers services from approved providers.
Medicare: Medicare can cover skilled short-term medical expenses that are necessary from a specific event, often resulting in a hospital stay. It does not cover ongoing personal or custodial care.
Veteran’s Assistance: Eligible veterans can use assistance for long-term care. The VA uses specific health service providers that can help with a range of heath care.
Life Insurance: Life insurance policies can be used for long-term care. Accelerated death benefits and viatical settlements enable you to sell part of your policy to a third party at a discount to pay for health services. A life settlement sells the policy entirely for the present value, an option to those who no longer want a policy.
Disability Insurance: This employer-sponsored insurance covers some of the income lost when you are unable to work due to an illness or disability. While it is not specifically provided for long-term care, you are able to use the money as you see fit. It is generally offered by an employer up to age 65, and does not continue into retirement.
Family Provided Care: Family members that are willing to assist you with care can be a great relief. While their help can reduce costs, they may not realize the time and energy required with care giving. They may also not be able to provide an expert level of care and can result in stress and strain.
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