The Pew Research Center reports that 64 percent of adults agree false and misleading news articles creates confusion. Elections and politicians are not the only victims of misinformation and myths. For years, long-term care insurance has been thought of as a nursing home benefit. While most long-term care policies cover such care, today’s products and claims include broader benefits. Here are three misconceptions your clients may have about long-term care insurance.
Myth: LTCI primarily covers nursing home care.
Fact: Most long-term care claims actually begin at home, in fact more than 52 percent of claims start there. Less than 20 percent of initial claims are for nursing home care. Most of us prefer to stay in our homes as long as possible. Long-term care trends reflect the increase of custodial care provided in private residences. More than four times as many people are receiving care at home compared to those in a nursing home. By 2020, home health care positions are expected to increase by 69 percent. Communities and health care providers have also come to understand the benefits of aging in place and are taking steps to support aging Americans and their families achieve their desire to remain at home.
Myth: It’s hard to qualify LTCI.
Fact: More than 78 percent of applicants between the ages of 45 and 64 are approved for coverage. Health condition does play a large part in qualifying for long-term care insurance and aging often begets declining health. Waiting until age 70 or older increases the likelihood of being declined by 46 percent. Of course, there’s also a premium reward for applying early for coverage. Policy premiums are based on age at the time the policy is issued. Based on an AALTCI 2018 survey of LTCi premiums for identical coverage, waiting just five years increased the premium by 7.4 percent. The applicant waiting 10 years will pay more than 31 percent more premium.
Myth: I won’t need long-term care.
Fact: Last year, the industry paid more than $9.2 billion in claims to 295,000 insureds. Industry experts expect that number to grow to $10 billion next year. In 2017, almost three-quarters of newly filed claims were for insureds 80 and older. A 65-year-old woman today has a life expectancy of 86. The longer we live, the more likely we are to require some form of assistance with the activities of daily living. The U.S. Department of Health and Human Services estimates half of us will need long-term care in our lifetime, the older we get, the more likely some form of long-term care is necessary.
Is It Time for A Reality Check?
Long-term care insurance returns more than 2-to-1 in benefits; $2.78 for every $1 in premium paid, according to Association of Health Insurance Providers. That same study reveals the average length of time in a nursing home is 5.7 years, and the average time of home health care is 5.4 years. Compare the current cost of care in your area and the projected cost in 20 years. Your DIS representative can answer any questions you have about LTCi. Call us today to learn more about the importance of planning now for long-term care.