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May 20 2011 10:53 AM

Since Americans are living longer, what changes are being made in long-term care insurance to make sure people’s needs are met as they advance in years?

Thanks to both medical advances and lifestyle changes, people are living longer. According to statistics, the number of people over age 65 is expected to double by the year 2050. And the fastest-growing segment of this population is the over-80 group.

While this longevity is wonderful, it also means that the older you are, the more likely you are to develop a chronic disease that may cause you to require long-term care. Past generations relied on younger family members to take care of them in their aging years. However, recent generations may live far away from their parents or may not have the capacity to care for their parents. Also, the potential costs of long-term care have grown. This is why long-term care insurance has seen a growth in popularity.

Changes have been made to ensure that more people will be able to pay for long-term care if they need it.

One of these changes is the introduction of combo products: life insurance policies or annuities that also can be used to cover nursing home or home care expenses. A main benefit of these policies is that any money in the account that is not used can be passed on heirs after the policyholder has died. This is in contrast to traditional long-term care insurance, whose premiums are paid whether you need care or not.

However, these combo policies are more expensive than traditional life insurance, and the payout amounts are limited. Depending on the level of care you may need, the payout might not be enough to meet your long-term care needs. The increased need for long-term care has also prompted changes at the federal level, including the CLASS Act.

Now, long-term care insurance policies also provide many options to meet many levels of need at a variety of price points, so make sure you understand all of your available options. Variables include:

• The level of inflation protection.

• The daily benefit amount.

• The benefit period (how long your benefits will be paid).

• The elimination period (the waiting period before your benefits start).

• The settings covered (assisted living, nursing homes, home care).

• Renewability.

• Premium increases.

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Laura Adams is a personal finance expert and award-winning author who is Senior Insurance Analyst for InsuranceQuotes.com. She represents Bankrate Insurance’s web properties in the media and works as an advocate to make sure consumers protect their financial futures by having the right kinds of insurance.

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