Tag Archives: finance

Why Seniors Need To Have a Financial Economic Stimulus Plan Of Their Own

If seniors or baby boomers sit back and wait for things to get better in this unprecedented and never before seen economic disaster in this country and in fact around the world, then they better think again.

With bad news hitting our air waves everyday all day long, it is becoming more increasing for older citizens take matters into their own hands, and not wait for things to change you must change them yourself. So how do you make changes in your financial situation with all of the downturn everywhere you turn? The problem that many are facing around the country is what we can and can not do!

The Stock Market is now down 55% of its high and predicted to go even lower so this is not the solution.
Pension funds and many investment funds are invested into the markets and have lost a large portion of the principle balances. (Down as much of 75%) Real Estate values are down all over the country as much as 60% and foreclosures are up 22% since the beginning of the year. Fuel costs have gone down but the up cost that the higher prices caused have not come back down. Unemployment rates hit 8% and in some areas as much as 10% and is expected to increase and stay that way for sometime to come.

So what can seniors and their families do to secure that their futures aren’t heading totally in a downward tail spin. There are solutions and steps that can be taken to alleviate some of the economic pressures that maybe around for many of us for the rest of our lives. Like I said this is unprecedented in history and there is no one who has the answers or how to fix it. The one thing is sure we need to look out for ourselves and as seniors we need to think about the last place there maybe money available and that is the home.

Your home may not have the value it had four or five years ago which by the way was over inflated in the first place so don’t think you have lost something that shouldn’t have been there in the first place. It was FAKE!
So what is the real value of your home and how is it determined. If you purchased your home 30 years ago and you paid your home off, the fact is your anticipated appreciation should have been between 3-5% per year. But when the market took off ad many people cash out the equity in their homes with hope that they would sell their homes or would be able to pay it off from their proceeds or gains. This did not happen! In many cases they lost no only the interest but the principle of the investment.

Here is good way to look at the value of your home today!
What did you pay for the home originally!
Over the years you lived in the home so what did it cost you!
What would it cost you today to replace your home if you sold?

Take the original purchase price and multiply it out by the national average that should have taken place which would be a national average of 5%.Once you have done this take the value and ad 10% for improvements if you did any. Now you should have the value that your home should have been without the boom years .
If your home doubled in value you are ahead of the game, because not only did you live in it all these years but you also received tax benefits over the years that you paid for it.

Now that you know what the value should have been you can now take a look at what the market says that your home is worth. By visiting a number of websites out there that can give a pretty good idea of what it is worth if you could sell it. The biggest word in the English language is IF……

Now for the big answer to the senior who is struggling to make ends meet and are thinking of where to go to get the money to live off of for the rest of their lives. The Reverse Mortgage is the answer for many people who are in need of having funds to use for living until they leave this world. This program not only provides you with money to live from, but also gives you great flexibility. In this program called Reverse Mortgage you are in complete control over the funds that you receive, you have the option of taking all of the money or setting up and monthly income or having a credit line for future use. One of the best parts of the program is that if you plan on living in your home for the rest of your life you can literally freeze your home value from going down any further, unlike if you take out a conventional mortgage.

In this program you are paying a Mortgage Insurance premium to the Federal Government; too not only protect the lender but to protect you and your heirs! The lender is protected should the home value decline and the loan balance which will increase over time the insurance would make up the difference to cover the loss. For you the or your heirs should the home value be less the loan balance at the time the loan is going to be paid off the insurance would make up the difference and your heirs or you would not have to worry about having to come up with the money. In addition; none of your other assets such as; investments, insurance proceeds or savings can be attached to pay the loan off this is called a NON-RECOURSE LOAN.

So as you can see this is a very important issue for many seniors and how they can make a Reverse Mortgage as part of her financial plan and live without fear of not being able to take care of their needs now or in the future. Plan today for tomorrow and don’t be afraid of a Reverse Mortgage it is truly a program that will change your life for the better and give you money without ever making another payment for as long as you live in the home.

About the Author:
I am a Reverse Mortgage Specialist I have spent over 20 years as a Real Estate broker and the last 10 years in the mortgage industry, and 5 of them providing Reverse Mortgages. My years as a professional, I have always felt that helping our seniors is helping the back bone of this country. Our seniors are the ones who made this country great and in the time of their lives that is so suppose to be their golden years it is in many cases painted black. I have dedicated my life to helping them achieve some sort of financial independence and help to enjoy the fruits of their labors. Visit http://www.bestmortgageplans.com or call toll fee 877-463-6546 ext 7807

Getting the Government to Pay Family Members For Eldercare at Home

Some 44.4 million adult caregivers — or 21% of the U.S. adult population — provide unpaid care to seniors or adults with disabilities, according to a 2004 study by the National Alliance for Caregiving in Bethesda, Md. On average, those caregivers provide 21 hours of care a week and the average length of time spent providing care is 4.3 years.

Over the years, the National Care Planning Council has received many public requests. A number of these requests have been from family caregivers who had to cut back on their employment or even quit their jobs in order to take care of one or both of their parents. Invariably these caregivers assume there is a government program that will pay them to provide this care. Only recently have we become aware of some programs that will pay family members. These programs are not publicized and the public is largely unaware of them or how to receive them.

Money Follows the Person—MFP (Self-Direction in Care):

In recent years, some state Medicaid programs have been experimenting with the idea of providing a budget to elderly Medicaid recipients. This money can be used to hire family or friends to provide care at home. Most of these programs are very limited, and there are waiting lists for them. Also, the amount of money available may not always be enough to compensate a family member to provide full-time care in lieu of maintaining employment.

The attitude of our government is quickly changing and there is now a new initiative to provide income for family caregivers. The Deficit Reduction Act of 2005 allocated $1.4 billion — the largest demonstration grant in Medicaid history — to a program called “Money Follows the Person.” This program is designed to transition individuals receiving Medicaid and who are living in institutions, back into the community. In 2007, 31 states received their portion of the grant money pie to begin demonstration programs offering more choice in care besides an institution. Most of these state programs offer a concept called “self-direction” which allows a budget to be established by Medicaid for the care recipient. Self-direction allows the care recipient to spend this money hiring any caregiver of choice and this typically includes friends and family.

Unfortunately, this is not a widespread benefit for elderly Medicaid recipients and in addition only applies to bringing elderly people out of institutions and back into the community to receive care. Over the next five years, only 34,395 elderly care recipients nationwide are expected to be transitioned to community-based care through this program. Even though this represents a fraction of the elderly, who over the next five years are expected to receive Medicaid services in institutions, there is still a possibility for the family to apply for one of these programs and to have the government pay for their care services.

Using the Veterans Aid and Attendance Pension Benefit:

A totally overlooked source of money to pay family caregivers to provide care at home is the aid and Attendance Pension Benefit. This money is available to veterans who served during a period of war. Pension money is also available to the widows of these veterans. This benefit, under the right circumstances, can provide up to $1,843 a month in additional income to pay family members to provide care at home. 

It also comes as a surprise to many people that about 33% of all seniors could qualify for the aid and attendance benefit. That’s how many veterans or their surviving spouses there are in this country. Getting the aid and attendance benefit to pay for family caregivers is not an easy task. This is because there must be a caregiver contract in place and services for care must be initiated and thoroughly documented before application can be made. Getting these applications approved requires using a consultant who understands the documentation requirements. Very few people can do it on their own.

Using Medicaid Spend down to Pay Family Caregivers:

In order to qualify for Medicaid nursing care, a person must spend his or her cash assets down to less than $2,000. Instead of giving this money to the nursing home and waiting for Medicaid to kick in, the potential beneficiary can instead transfer this money to a child in return for caregiver services. This is not considered a gift and if done properly does not create a penalty for Medicaid eligibility. The strategy also allows Medicaid to take over paying its portion of the nursing home costs much sooner.

As with the caregiver contracts for VA benefits, an expert in this area of Medicaid benefits is required in order to do it right. In fact, the same type of caregiver agreements used for obtaining extra income under the veterans benefit can also be used for Medicaid. A consultant who is proficient in both the aid and attendance benefit and Medicaid personal caregiver agreements can be of great service to the community. This contracts’ consultant can help relieve a great deal of caregiver stress by providing funds to help that caregiver cope with personal financial pressures.

About the Author:
The National Care Planning Council and its affiliated members are dedicated to helping the American public recognize the need for long term care planning and to helping implement that planning. Planning for long term care is important. To learn about The National Care Planning Council and long term care visit our website at  http://longtermcarelink.net
Article Source: http://www.ArticleBiz.com

Reverse mortgage: Cash bonanza for seniors? 

Reverse mortgages: What are they and how do they work? 

Reverse mortgages were once a financial novelty and have now entered the home loan mainstream. This is very good news for senior homeowners who have to be 62 or older to qualify. Reverse mortgages are one of the few ways that seniors can cash out part of the equity in their home without moving or incurring loan payments. 

Reverse mortgages are in essence mirror images of regular mortgages.  As unbelievable as it sounds, rather than making payments to a lender, the lender actually makes payments to you in a lump sum in monthly installments.  The best part is that you actually don’t have to repay the loan as long as you live in your home.  The reverse mortgage is only repaid from the sale of your house, or after you move or die.
The only real negative aspect of reverse mortgages is that they usually have high upfront closing costs.  Those charges have been falling, but even at 5% of a home’s value (which is about the going rate), reverse mortgages looks so much better when the alternative is to sell and pay 6% to a real estate agent. 

What if the home’s value at the time of the sale doesn’t cover the balance of the reverse mortgage? 

If the home’s value at the time of sale doesn’t cover the balance of the reverse mortgage, the lender is actually on the hook for the loss rather then the homeowner or his/her heirs.  That is absolutely excellent downside protection.  The upside is even better: If the property’s value rises over the years, the senior homeowner or his heirs can keep all of those profits after paying off the reverse mortgage.  In other words, you can cash in on cashing out even when the market continues to trend upward. Overall, reverse mortgages are an excellent opportunity for seniors to take cash out on the equity of their home without moving or having to sell their property.

Information from Money magazine, August, 2005.

Additional information and webpage by Paul Susic Ph.D. Licensed Psychologist 

Long term care insurance: Who needs it anyway?

How do I know if I would be a good candidate for long-term care insurance?

Long-term care insurance is a gamble, as is the case with most insurance. If you end up needing years of supervision and care, then long-term care insurance was a good buy. If you die suddenly, never using any sort of personal or nursing care, than it was a waste of money. And you always need to remember, that no policy covers all of the cost. There will always still be some bills to pay even with long-term care insurance.
As you or your loved ones begin to consider long-term care insurance, you should beware of pushy salespeople and scare tactics. The costs are high and the fear is great, so make sure not to buy in a panic. Many people simply should not bother with purchasing long-term care insurance. Agents get enormous commissions (often 50% of the first year’s premium and another 10% for every year after that) so they have plenty of incentive to sell these policies. You need to think long and hard before considering this as a worthwhile investment.

Long-term care insurance helps to protect assets and preserve the inheritance for heirs. However, it’s very expensive and never covers the full cost of care. So, who are some of the individuals who should consider buying a long-term care insurance policy?

Individuals with ample assets. The primary reason to buy long-term care insurance is the protection of an individual’s assets in excess of the cost of long-term care. If your parent or loved one is believed to become eligible for Medicaid within approximately 12 to 18 months of entering a nursing home, you should probably not consider this as a viable investment. Nursing home costs vary significantly from area to area, so you should look at the cost within your specific area. Just as a rough guideline, you may consider long-term care insurance if your parent has at least $100,000 in assets (not including his house and personal belongings).

Those with ample income. If your parent can afford $300-$600 per month in premiums without affecting their lifestyle, they may consider long-term care insurance. Some experts have suggested that this type of coverage should not cost more than 5% of a person’s total income, which may be a pretty good guideline to follow. Also, will they be able to continue paying the long-term care insurance premiums if they rise or if your parent’s income falls. You need to keep in mind, if your parent fails to pay premiums, their policy will be canceled; so they should not even start this type of coverage unless they plan to continue it.

Those whose assets and income are not overly ample.
People with a large income or more than $1 million in savings, generally don’t need long-term care insurance as they will be able to pay for their care out of pocket. However, they might still want it in order to protect their assets for heirs or perhaps just for little peace of mind.

How do I know if I would be a good candidate for long-term care health insurance?

Long-term care health insurance is a good buy for various individuals as described on the previous page. Long-term care health insurance is also preferable for people who fall within the following categories:

Those who are likely to need long-term care. Although you can never be sure, you will have to make an educated guess if you will be an individual likely to eventually need long-term care. After the age of 60, the likelihood of needing a nursing home at some point in time is approximately 40%. The average length of stay is about 2.5 years. However, 45% of nursing home stays are for three months or less, with the majority being less than one year. However, 10% of people who enter a nursing home are there for five years or more. Another 30% of older individuals end up needing assisted-living care, or a significant amount of assistance at home.

So, what does this actually tell you? It means that at some point in time you or your loved one have a relatively high probability of eventually needing a nursing home, assisted living or homecare, but, for perhaps not for more than a year or two.

You can also refine your probabilities of whether or not your loved one may need an expensive nursing home by considering their health and family history. If they have a family history of sudden fatal heart attacks, then they may be less likely to need extended nursing home care then say a person who has a family history of Alzheimer’s disease. Are they a smoker? Do they exercise? How is their mother’s bone density? All of these factors play a role in how much care an individual may need some day.

Another factor in considering whether someone is a good candidate for long-term health insurance is; “Do they have a lot of family support, a wealth of local volunteers, and inexpensive services on which they can rely or do they live in a community with little in the way of social services?” If your mother lives near your sister, who is retired nurse with time on her hands, she is less apt to need nursing home care then a person who lives alone, far from family and other sources of social support.

Those who have no plans of entering a continuing care retirement community. Continuing care retirement communities as they are referred to, usually charge large admission and monthly fees, but they usually provide almost all the care that will be necessary, from assisted-living to nursing home care. Having long-term care health insurance would be redundant and not necessary in these circumstances.

By Paul Susic Ph.D. Licensed Psychologist

Health Insurance 101 for Senior Citizens

Adequate health insurance is becoming one of the most precious assets that one can have. Certainly, health insurance is a huge priority to most senior citizens. Protecting your health and making sure that you have access to adequate medical care is one of the most important things that you can do to make your life active and fulfilling. It is quite obvious that accessible health care is not always affordable to everyone in the United States. Recent publicity about Medicare reform has made it clear that this is especially true for our nation’s seniors. This web page will seek to be a primer for senior citizens in relation to some of the basics on health insurance for your daily needs.

Health insurance types:

There are various different kinds of health insurance. While each has different requirements and is run by different entities, it is important to understand that many individuals combine several types of insurance coverage to meet their needs. It may be confusing to deal with all of these different types of health insurance coverage, but we will seek to explain them in basic detail. The three different types of insurance which will be discussed on this page are Medicare, Medicaid, and private health-insurance policies, which will each be described briefly on this page then covered in more detail on subsequent pages.

Medicare health insurance:

Medicare is a federally funded health insurance plan designed to help pay for senior citizen’s health care needs. It basically has two parts, Part A, which covers hospitalization and Part B which covers outpatient services such as doctors visits. You are usually eligible for Medicare just prior to your 65th birthday.


Medicaid as a health insurance program ran by your state government in conjunction with some financial assistance to your state by the federal government. It is a program developed for low income individuals (which may include seniors) and was originally intended to be an insurance of last resort. Many people have heard some information about “spending down to Medicaid”, which means that a person must use up most of his or her assets before they may qualify.

Private health insurance policies are usually provided by employers or are purchased by individuals. These policies are provided by private health insurance companies and premiums are paid for by employers, employees or by other insured individuals. Some of these private health insurance policies are referred to as Medigap policies, which means that they are designed to specifically covered things in which Medicare does not. Long-term care insurance is a private insurance plan purchased specifically to cover the costs of assisted living and nursing home care, which will be covered on separate pages of this web site.

By Paul Susic Ph.D Licensed Psychologist Senior Care Psychological Consulting

Choosing The Right Long Term Care Insurance Policy

When you are considering long-term care insurance, or LTC insurance, there are many things to consider as you try to choose the best policy to match with your personal circumstances.

First of all, you should begin considering coverage at the earliest possible age. Most LTC providers only underwrite people who are between the ages of 40 and 80 and who don’t already have impairment to their ability to perform at least five of the six basic Activities of Daily Living, or ADLs. So if you are at least 40 and healthy right now, the time is now to consider buying LTC insurance, as the younger you are when you take out a given policy the greater your amount of options and the lower your premiums.

If you are now considering LTC insurance, it’s important for you to know the features and benefits you want to possibly pay for.

First, consider how comprehensive you want the LTC coverage to be, which will affect your premiums. For instance, do you want to just cover going into a nursing home, or just home-based health care provided by a nurse, or just adult day care, or a mixture of them or all of them?

Another factor that will affect your premiums is how much daily or monthly coverage you want. The more coverage you select the higher your premiums, but remember if you do need to activate the policy and your future costs are greater than the limit you have selected you will be directly responsible for making up the difference to the health care providers. Also consider whether or not you want a lifetime cap or unlimited lifetime coverage in sum total insurance policy payouts, based on the options available to you based on your age at the time of application.

Still another factor is benefit period. Most policies offer benefit period limits of anywhere from two to six years, but you can also pay to have a lifetime benefit period. Along with this, you’ll have to consider the duration of the elimination period (analogous to the “deductible” on other types of insurance). During the elimination period ALL accrued medical expenses that the LTC policy covers are paid out of your pocket. It is possible to have a zero-day elimination period, but your premiums will be quite high for this. Most policy providers’ elimination periods won’t exceed 100 days.

The longer this period the lower your premiums, all other things being equal, so this is one area where you can save quite a bit of money on premiums if you are relatively young, as you can reasonably expect to have enough money saved and invested in the future to finance one of the longer elimination period options should the need arise.

Also ask the insurance agent about an inflation protection feature. This will be very important especially if you are younger, what with health care costs constantly on the rise. Imagine what would happen to you if you selected a comprehensive coverage limit of $100 per day and 20 years from now you need to use the insurance but that same amount of medical care now costs $1000 per day!

Finally, one thing in an LTC policy that can substantially raise your premiums (even double them) BUT be extremely important is called the Non-Forfeiture Benefit. This feature will allow you to continue receiving the policy’s benefits even if you stop paying the premiums. If you are severely debilitated or financially destitute from paying your part of the medical expenses and aren’t able to pay the premiums in the future, this benefit could literally save your life or prevent your children from going bankrupt taking care of you.

About the Author:

Andrew Long writes for a series of websites about Care insurance and health related issues. A main area of expertise and content covers long term care insurance policy and disability insurance policies, as well as healthcare insurance

Article Source: http://www.ArticleBiz.com

Long term care insurance: What is it exactly?

Long term care overview:

Long-term care insurance coverage is the missing piece in both Medicare and other private health insurance plans. Long-term care insurance may be incredibly important to consider when you recognize that nursing home care currently averages about $60,000 a year nationally, and is well over $100,000 a year in many areas. Home health care is frequently less but not always. (If you do the math, at $15 per hour, around-the-clock, it would cost more than $130,000 per year). In considering these two options and the reality of the related expense, the additional option of long-term care insurance appears better and better.

An additional impetus to consider long-term care insurance is when you consider this: these prices don’t include drugs, medical supplies, doctor’s fees, or any special services that you may consider for yourself or loved ones. Also, nursing home costs are anticipated to rise approximately 5% per year.

Long term care insurance is relatively new, and it is almost a given that your parent or loved one does not have it. If they are quite old, they will probably not even be eligible for it. These policies are not usually viable options after age 80, or if your elder already has received a diagnosis for some debilitating illness.

If your parent is eligible and has substantial assets, they may want to consider long-term care insurance. Or, if you’re nearing the age group of between 50 and 60, it may be worth considering for yourself. However, you have to consider every aspect of coverage to determine whether long-term care insurance is really right for you.

Prices vary depending upon the type of long-term care insurance plan that you’re considering, and the age and health of the buyer. A 60 year-old person in good health can expect to pay about $3000 a year for a policy, while premiums for an older person may reach more than $8,000 per year.

You need to be aware that insurance companies have, by and large grossly miscalculated the cost of long-term care insurance policies, and are probably going to be imposing steep rate hikes. Also, some customers are also finding that companies are resistant to actually paying out benefits for long-term health insurance coverage when the actual time comes.

By Paul Susic Ph.D. Licensed Psychologist Clinical Director- Senior Care Psychological Consulting

Long Term Care Insurance Policies: Selecting the Best?

How do you go about selecting the long term care policy that is best for you?

As with in choosing any other product, you always need to compare several long-term care policies to find the one that best suits your parent or loved one’s needs. You may need to contact your state insurance department to find out which companies provide long-term care policies in your area. Another option may be to add a rider onto a current health insurance policy. Several companies offer free quotes through the mail or over the Internet. You may do a search on the Internet using “long-term care insurance” to find some of these companies.
It is not easy to compare long-term care policies. They vary in so many ways- when they come into effect, what they cover, how benefits are paid etc… You should ask to see an “outline of coverage” detailing a long-term care policy’s benefits, costs, restrictions, and limitations.

When reviewing long-term care policies, you should be sure that any special features are worth the price paid in higher premiums. Additional coverage of any type will add substantially to the cost. You should not simply consider what your parent or loved one wants and then get quotes. You should compare the basic packages with the more expensive policies, see what each item adds to the price of the policy and then determine if it makes sense to pay the higher premium.

A growing number of employers are now offering long-term care policies to employees, retirees, and sometimes employee’s parents as well. Usually this means discounted premiums (they’re often paid for with pretax dollars). The federal government is now offering long-term care policy options to most federal and U. S. Postal Service employees, active and retired members of the uniformed services and their spouses, and adult children (employees can also get insurance coverage for their parents, parents-in-law and step parents). For more information about the federal program for long-term care policies you should go to www.ltcfeds.com or call 1-800-582-3337.

Even if your employer offers a long-term care policy option, look at other plans and compare. Just because the company has a group plan that includes long-term care policies doesn’t mean it’s the best option for you or your parent.

What do you look for in a long term care insurance policy?

You should look for the following features in shopping for a long-term care insurance program:

A solid company. You should look for a well-known, stable company with a good reputation. Buying from a strong company is absolutely essential because the long-term care insurance field is still young and companies have little history in which to base their underwriting assumptions. A strong long-term care insurance company will be better able to absorb errors in estimates.

It is also a pretty good idea to check the company’s rating with Standard & Poor’s (www.standardandpoors.com) Moody’s (www.moodys.com ) or A.M Best (www.ambest.com). You should look for one that falls within the top two categories related to their financial strength.

You should ask the company how long they’ve been providing long-term care health insurance. A company who has been in the market for a while (perhaps 10 years or more), will be more experienced and their rates will be more stable.

It’s also worthwhile to call the state insurance department, which may have information about complaints that have been made against particular insurance companies.

You should always be especially suspicious if a salesperson tells you that the state will guarantee coverage if the company goes into default. The premiums may be higher for these long-term care insurance policies, and if the company fails you can count on the fact that the coverage offered by the state will not be as generous as the original policy.

Tax qualified. Most long-term care insurance policies are qualified, but you should still check and make sure that they are. “Tax qualified” means that a policy conforms to the 1996 Health Insurance Portability and Accountability Act, or HIPAA. What this actually means to you is that the benefits cannot be taxed, also, a long-term care insurance policy must be qualified if someone wants to deduct the premiums as “medical expenses” from their taxes. (These expenses must be greater than 7.5% of a person’s adjusted gross income).

Comprehensive coverage. “Facility-only” policies cover only one type of care, usually nursing homes. Most long-term care insurance policies, however, offer “comprehensive” coverage. These policies should cover care in a nursing home or assisted-living facility, as well as care provided at home, adult day care, hospice care, and even respite care. It makes more sense for most people to buy a comprehensive policy, which gives them more and broader options in their long-term care insurance coverage.

Some other important features of a good long-term care insurance plan include:

Early eligibility. It is important to look at when a policy holder becomes eligible for long-term care insurance benefits. You must find out what the “benefit triggers?” are. Most long-term care insurance policies kick in when a person cannot handle two or more “activities of daily living” or ADL’s. These include bathing, dressing, eating, getting from a bed to a chair, toileting and being incontinent of bowel and bladder. A good policy should also cover issues related to memory or cognitive impairment such as different forms of dementia, that will necessitate some level of supervision. Some will cover care which is deemed “medically necessary” such as when an individual with congestive heart failure may require home care.

A reasonable deductible period. Most long-term care plans have a waiting period (called a “deductible” or “elimination”period), which means that the policy does not really go into effect until a person has paid for care themselves, for a certain number of days. The longer the waiting period, the cheaper the long-term care policy.

A waiting period of less than 20 days will usually make a policy much more expensive. On the other hand, waiting periods of more than a hundred days, greatly reduce the chance that an individual will ever put the policy to use. A reasonable amount of days to wait is usually between 30 and 40 days.

Adequate reimbursement. Most long-term care policies pay a fixed amount for each day of long-term care, and then you pay the remainder. The benefits usually run in a range of between $50 and $300 a day. Of course, the higher the amount of the benefit per day, the higher the cost for premiums.

Home health care is usually covered at a rate of about 50% – 60% of the rate that it will cost your loved one to be in a nursing home or assisted-living facility. So in effect, a policy that pays $100 a day for nursing home care will usually pay about $50 a day for home health care.

In order to determine how much long-term care coverage your parent needs, figure out how much they can afford to spend on long term care (or is willing to pay). Now find out the average cost per day of nursing homes in your area. If a nursing home costs $160 a day and your loved one has an average of $70 of daily discretionary income, then they need a policy that offers at least $90 a day in coverage. Also, you need to keep in mind that nursing home rates will continue to climb, while your parent or love one’s income may not. Finally, it’s always important to remember that the rates paid for nursing home care do not include some expenses, such as drugs and supplies and the cost for additional services such as professional mental health and medical services.

By Paul Susic Ph.D. Licensed Psychologist