31 Jul SHORT-TERM CARE INSURANCE: THE NEW ALTERNATIVE TO LONG-TERM CARE INSURANCE
As fewer companies offer long-term care insurance since people are living longer (and insurance companies miscalculated increased life expectancy) and fewer policyholders dropped their policies, a new alternative has been developed for those who have poorer health – short-term care insurance. The trend in recent years has been decreased traditional long-term care policy purchases and increased purchases of hybrid long-term insurance (use of annuities and life insurance policies that convert to an immediate annuity in the event of disability) since premiums do not increase and you don’t “use it or lose it”. Now, short-term care insurance is another tool in the toolbox to be considered – especially if you might be too unhealthy for long-term care insurance coverage, you can afford more care and you desire to avoid Medicaid (many plan for Medicaid so that the government helps pay some or all of the long-term care costs).
Short-term care gives up to 360 days coverage for skilled nursing care, assisted living or adult day care and sometimes home health care if the insured is unable to do at least two (2) activities of daily living (feeding, bathing, dressing, transferring, toileting, etc.) or has cognitive impairment. It is designed for those between fifty (50) to seventy-nine (79) years of age and may have some health issues (although presently needing assistance with two (2) activities of daily living). Short-term care insurance does not require medical records or cognitive testing (so you might get this insurance even if you don’t qualify for long-term care insurance). Payments (the daily benefit can range from $50 – $300/day) can be made directly to the provider of care or to the insured. If you afford better care by avoiding Medicaid and you don’t qualify for long-term care insurance, short-term care insurance is a new option to consider.