Long Term Care Insurance Alabama Partnership Cost and Options
Alabama Long Term Care Insurance
This Alabama Long Term Care Insurance Review explains long term care planning in the State of Alabama. Here are the key points covered in this article:
- Long term care planning in Alabama.
- Who needs long term care?
- Does Medicare cover long term care?
- When should you buy long term care insurance?
- Long term care insurance options.
- Long term care costs in Alabama.
- Alabama Long-Term Care Insurance Partnership.
- Cost of long term care insurance in Alabama.
- Long term care insurance companies in Alabama.
- Alabama long term care insurance quotes and comparisons.
Click To Get Alabama Long Term Care Insurance Quotes. We’ll give you quotes and comparisons for the leading LTC insurance companies in Alabama.
Alabama Long Term Care Planning
Planning ahead for future long term care needs is a key part of retirement planning. Many people have had first-hand experience with a loved one who needed long term care services. These experiences underscore the reality of the financial and emotional stress when a loved one needs long term care.
Long term care insurance can protect your retirement assets. Plus it gives you the peace of mind, knowing you can cover the cost of long term care if you need it in the future. A long term care plan also protects your family from having to be caregivers. And it enables you to choose where you’ll receive any care needed in later years.
Who Needs Long Term Care?
Someone turning age 65 today has about a 70 percent chance of needing some type of long term care during their lifetime. While one-third may never need long term care, 20 percent will need it for longer than 5 years. The average length of time people need long term care services is 3 years.1.
In Alabama, the average cost for 3 years of long term care is $244,185 ($81,395 per year) at 2019 rates. That cost is projected to be $441,024 ($147,008 per year) in 2039.2.
And it’s not only seniors that need long term care. Over 35 percent of people currently receiving long term care services are between 18 and 64.3.
Does Medicare Cover Long Term Care?
Medicare is the federal health insurance program for those over 65 and some younger people with disabilities. And Medicare does not pay for custodial care which makes up more than 90% of all long term care services.
An example of custodial care is when someone needs help with walking, bathing, eating, dressing or using the toilet. Custodial care is what people need most when they have a physical impairment from a stroke. Or, due to cognitive impairment from dementia or Alzheimer’s disease. Don’t make the mistake of thinking Medicare covers long term care costs. It doesn’t.
When Should You Buy Long Term Care Insurance?
Like most advisers, we recommend buying long term care insurance in your fifties or early sixties. The primary reasons for this recommendation are:
- The younger you are when you buy a policy, the lower the annual premiums.
- By the time you reach your mid sixties, you’re more likely to have a medical condition that makes you ineligible for a preferred-health discount, or makes it tough to get coverage at all.
- Even though you’ll pay premiums a longer period of time, you’ll typically pay less overall than someone buying at an older age.
So it almost never pays to wait. And, while you’re waiting, you’re uninsured. If an accident or illness happens causing you to need long-term care, you’ll have to pay out of pocket.
Alabama Long Term Care Insurance Options
There are two types of insurance in Alabama that pay for long term care costs. And each type of policy has its specific advantages. One of our licensed professionals can provide your options to help you decide which is best for you.
Traditional Long Term Care Insurance
You pay an annual premium, and if you need long term care due to a cognitive or physical impairment, the policy pays for your care. Traditional LTC insurance policies make up about half of all long term care policies sold.
Hybrid Long Term Care Insurance
A hybrid long term care insurance policy combines the benefits of life insurance, or an annuity, with long term care benefits. You can buy a hybrid long term care insurance policy by paying a one-time lump sum premium, or over a set period of time.
If long term care is never needed, the policy works much like a traditional life insurance policy. It would then pay a death benefit to your beneficiary when you die. And the death benefit is often similar to the amount paid for the policy. But if you need long-term care, the amount of money available can exceed the death benefit or long term care annuity value, often several times over, offering tremendous leverage of premium dollars.
Long Term Care Costs in Alabama
Alabamians need to know long term care costs when planning for their future long term care needs. Alabama’s current cost of care and future cost projections indicate how much long term care protection you need.
The best study on Alabama long term care costs is by the Fortune 500 company, Genworth Financial. Their 2019 Cost of Care survey includes long term care costs of more than 15,000 long term care providers. Here is the current cost of long term care in Alabama:
Alabama Long Term Care Costs – 2019 (annual)
|Region||Nursing Home (private room)||Nursing Home (semi-private room)||Assisted Living (private room)||Home Health Aide (44 hours/wk)|
|Alabama Median Cost||$81,395||$76,650||$39,000||$41,184|
Alabama Long Term Care Insurance Partnership
The Alabama Long-Term Care Insurance Partnership Program (Partnership Program) is a three way partnership. It joins the State of Alabama, long term care insurance companies and the federal Medicaid Program. These LTC policies are often called Partnership Policies.
The purpose of the Alabama Long Term Care Insurance Partnership is to encourage people to plan ahead for how they will pay for future long term care needs. Long Term Care Partnership Policies have an extra level of protection compared to traditional long term care insurance policy. They allow individuals to protect assets from spend-down requirements under Alabama’s Medicaid program if help under that program is ever needed.
Long Term Care Partnership Cost
Alabama Long-Term Care Insurance Partnership Program policies cost about the same as other LTC insurance policies. But at some ages, there is mandatory inflation protection. This feature of Alabama Long-Term Care Insurance Partnership policies can limit your choices when selecting policy benefits. Because of this, we believe it’s best to compare Alabama LTCi Partnership policies with non-Partnership policies. To best understand the differences, we suggest working with an insurance agent who specializes in long term care insurance.
Long Term Care Partnership Reciprocity
Consider the person who buys a Long Term Care Partnership Policy in another State and later moves to Alabama. Reciprocity means they will not lose the special asset protection when they move to Alabama. The State of Alabama would also recognize accumulated asset protection for Medicaid qualification, if the person were already receiving benefits from their Long Term Care Partnership policy before relocating.
Cost of Long Term Care Insurance in Alabama
What’s the cost of long term care insurance in Alabama? The cost depends on your age and health history at the time you buy the insurance. Generally speaking, the younger and healthier you are the lower the cost. Your long term care insurance cost will also depend on the following benefits you choose:
- Benefit Period
- Daily Benefit
- Elimination Period (a deductible in days)
- Inflation Protection (if chosen)
Complete the form on this page to request long term care insurance costs and comparisons specific to your situation.
Long Term Care Insurance Companies in Alabama
Alabama long term care insurance is available from several well respected insurance companies. We compare these companies to find you the best protection at the lowest cost. Here’s a list of the best long term care insurance companies in Alabama:
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1. 2019 U.S. Department of Health and Human Services (www.longtermcare.acl.gov), site accessed 06/12/2019
2. Cost of Care Survey 2019 (Genworth.com), site accessed 01/31/2020
3. Family Caregiver Alliance (www.caregiver.org), site accessed 6/12/2019