Home care and Long-term care disability insurance can also be called, or considered, living assistance disability insurance. It is also sometimes referred to as catastrophic disability income protection insurance. When recovering from an accident, injury, and/or illness, oftentimes additional care is needed for an individual. Needing assistance with activities of daily living (ADL’s) requires some to help with bathing, dressing, transferring, incontinence, toileting and eating. Other type of assistance would be with forgetfulness that may be a part dementia or early Alzheimer’s. Either way someone needs to be there to help.
Sometimes it can be a family member or outside assistance, such as a paid caregiver that is needed instead of family members. Long-term care insurance was designed to provide assistance financially to the individual and potentially affected family members. One of the main reasons people purchase the insurance is that they do not want to burden their spouses or close relatives, such as their grown children. They would rather have them in a management role of the care rather than in direct care-giving where they may get exhausted both mentally and physically.
The other main reason is asset protection as the hours of caregivers add up quickly for a day, then a week, then a month, finally, a year, which can be very expensive. For a quick illustration, say today you need care and have found an independent caregiver at $15 / hour, then, for 10 hours of care per day, the calculation is: $150 * 30 = $4500* 12 = $54,000 / year. You can see quickly how the numbers add up. Before you know it, a few years from now, it’s $500,000 or a million, if it were to be an agency and or a facility.
It is commonly incorrectly believed that Medicare will cover all living assistance costs when an individual becomes disabled. However, this is not the case, as Medicare is limited in its coverage only for “acute care” say after a stroke or a knee or hip replacement as rehab services to regain independence. However if a recuperation is not reached by a therapy, then benefits from Medicare are gone and the patient is discharged.
Long-term care insurance can at least partially cover some of the costs incurred when professional caregiving is needed, either inside the home or at another facility, such as a rehabilitation facility.
Consultation with a disability insurance broker is recommended and helpful to understand better the coverage and limitations of current insurance policies held, such as Medicare, Medigap Insurance (also known as Medicare Supplemental Insurance), Medicaid, or other similar policies for living assistance help.
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