Long Term Care Insurance

A LONG, stay in a nursing home can wipe out a lifetime of savings. Medicare pays 120 days in a qualified nursing home but pays nothing for long term custodial care. Even care in your own home can reduce you to a pauper's level, though not quite as rapidly.

Fortunately, the need for long term care coverage has become a major public issue. Congress is considering Federal legislation and more than 100 companies and 15 Blue Cross plans are offering a number of types of long term care insurance. Some of these policies pay as much as $200 a day toward the cost of skilled nursing care provided by a nurse or other medical professional. They also cover custodial care that is, if you do not need medical attention but you do require some help in dressing, eating and walking. The best policies include home care and day care as well.

The cost of this insurance varies tremendously, from $100 all the way up to $15,000 a year at Aetna, depending on your age when you buy the policy and the benefits you elect. Although nursing home care is generally not needed for people in their 50s and 60s, the price is far lower during those years than it is if you wait until you are 70 and over. For example, the average cost is about $300 a year at age 50. At age 65, the cost is about $675, and at 80, about $2,800.

If you are interested in securing long term protection, ask your insurance agent these key questions before you buy:

Does the policy cover the whole spectrum of nursing care? Skilled care generally includes such services as giving injections that can be performed only by (or under the direct supervision of) nurses, physical therapists or other medically trained experts. Intermediate care must also be under the supervision of skilled medical personnel, but registered nurses are not required to be on 24 hour duty. Highly trained or licensed people are not required at all for custodial care. Most long term nursing home patients need custodial care, as do patients in their own homes. Day care is for people who live at home but need supervision, or company, while they are up and around. Look for a policy that provides all of these kinds of care, that will cover you even if you need only intermediate or custodial care and that allows you to enter a nursing home without a prior hospital stay.

How generous is the daily benefit? It can range all the way from $20 to $200 a day. The nationwide average for care in a nursing home is $25,000 a year. Home care including physical therapy, help with medication and preparation of food costs at least half that much.

How long does a person have to be in a home before benefits begin? Some policies cover you from the moment you enter a nursing home. Others require that you be confined for a certain number of days, usually 20 to 100, before payments begin. You might want to remember that the longer the waiting period, the lower your insurance premiums will be.

How long do benefits last? Plans typically cover you for two to six years.

Does the policy include protection against inflation?

Are any illnesses, injuries or pre-existing excluded from coverage? Don't buy a policy that excludes nursing home stays due to mental or nervous disorders such as Parkinson's Alzheimer's disease. And be sure the policy is guaranteed renewable.