Who Needs Short-Term Care Insurance

Who Needs Short-Term Care Insurance

Short-Term Care insurance can make financial sense for anyone, but particularly for those age 50 and over

Short-Term Care insurance fills a significant gap in care plans, particularly for individuals age 50 and over. It provides financial protection if you’re faced with an extended recovery period following an illness or injury or can help ease the transition into receiving ongoing care services. 
 
The fact is, 70% of people turning age 65 will need some sort of assisted care in the future. Medicare provides benefits for 100 days of skilled nursing care, but you must be hospitalized in order to be eligible for them. Medicare pays 100% for up to 20 days, but you will be responsible for a copay for days 21-100 out of pocket.

Who should consider Short-Term Care insurance?

Although these plans can make a great deal of financial sense for anyone, Short-Term Care insurance can be an especially attractive option for a number of reasons:
  • Short-Term Care insurance plans are not gender based, which means there is no difference in the premium paid by men and women.
  • People who already have Long-Term Care insurance may want to utilize a long elimination period (time-based deductible) in order to have a lower monthly premium. Short-Term Care insurance has lower elimination periods (0-30 days) and can fill in the gap until coverage kicks in for a Long-Term Care insurance plan.
  • Short-Term Care insurance plans may be easier to qualify for than Long-Term Care insurance. Even if you didn’t qualify for a Long-Term Care insurance policy, you may still be eligible for Short-Term Care insurance.
  • You don’t think you will require care for more than 12 months, or you believe a Short-Term Care insurance plan will provide enough financial cushion to safeguard your assets in retirement.
Costs associated with rehabilitative or long-term care can add up quickly: $225 per day for a semi-private room in a nursing home, $119 per day for an assisted living facility, or over $20 per hour for in-home assistance. If you don’t have room in your savings or retirement plan for $50,000 to $100,000 in annual care expenses, you should consider a Short-Term Care insurance plan.

What do benefits for short-term care look like?

Short-Term Care insurance plans offer options for a variety of different situations. In addition to providing benefits for days of nursing home care, assisted living facilities, or even hospice, Short-Term Care insurance plans can provide much-needed financial support for recovery and rehabilitation, such as after an injury or illness and you’re unable to perform two or more activities of daily living (ADLs).

For example, if you undergo knee replacement surgery after an unexpected injury, you may not be able to perform all ADLs right away. You could have difficulty getting around your home or bathing yourself, and you won’t be able to resume driving until your surgeon clears it.
 
If you live alone and your adult children live in different states or have work schedules that won’t allow them to care for you while you recover, you’ll need to find someone who can serve as a caregiver during your recovery. If you have Short-Term Care insurance, you can utilize benefits for up to 120, 240, or 360 days to pay for an in-home certified agency worker to help you through your recovery process. The monthly premium for a typical Short-Term Care insurance policy can vary, but the lifetime benefit of such a policy can help you realize a cost savings when it comes time to pay for care. For a plan, paying out a daily benefit of $150 for 360 days with a 0-day elimination period, you can receive up to $54,000 in benefit payouts to offset the cost of assistive care.

Short-Term Care insurance offers financial assistance coupled with the ability to receive the type of care you want, where you want it, which can be the difference between ensuring a retirement on your own terms or not.
 
If you want to learn more about how Short-Term Care insurance can benefit you, click here to personalize a plan and get a quote today.

Photo credit: iStock
11-26-19
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