Traditional long term care insurance can be expensive, and while not without reason, we understand it is just not realistic for a lot of people’s budgets.
One alternative to traditional long term care insurance is short term care insurance, which allows you to get coverage for long term care services at a more affordable price. It can even be easier to qualify for if you have some pre-existing conditions.
What is short term care insurance?
Short term care insurance is basically long term care insurance that only covers about a year of care. The insurance will pay once you cannot perform at least 2 of the 6 activities of daily living or have a cognitive impairment, such as Alzheimer’s.
The benefit period is less than a year depending on your preference. Some short term care policies have the option of 90, 120, or 240 day benefit periods.
While short term care insurance policies will pay for care in a nursing home or assisted living facility, ,most will even pay for care right in your home.
The waiting period, or elimination period, is 0 days for most short term care insurance policies. This means that right when you start receiving care, it starts to pay out. This feature also makes short term care insurance a great option for people who might have a traditional long term care policy with a long waiting period.
It is important to note that short term care insurance is not available in all states. If you live in one of the states it is not offered in, there are options for more affordable coverage for long term care services.
Example of a short term care insurance policy
One short term care insurance policy that we sell has the following benefits:
One of the best features of this policy is that it pays $1,200/weekly for home health care services. It pays this benefit on an indemnity basis, meaning the insurance company just sends you the $1,200/week, it does not just pay you back for what you use.
This is a great feature as you can use this money to pay for the care that works best for your situation. If you want to pay a family member to help you, you can do that. If you do not need to use the full $1,200 a week, you can save what you have left over and use that to cover longer than the one year benefit period.
We have seen how hard it is to get families to use their own money to pay for the care they need. They are much more likely to use money from an insurance company. Having this $62,400 available for home health care will make it a much easier process for everyone.
Will I qualify for a short term care insurance policy?
The health qualifications for short term care insurance are easier than traditional long term care insurance. You can also get short term care insurance policies at an older age, up to age 89.
You do not have to be examined by anyone to get short term care insurance; you answer health questions right over the phone. Some short term care insurance policies don’t even have any height and weight requirements.
We have even been able to place clients with one short term care insurance policy after they were denied by another. The variance in health questions allows us to find the one that is most likely to accept you given your pre-existing conditions.
How much does a short term care insurance policy cost?
The cost of short term care insurance is going to vary based on your age and the policy you choose. Short term care insurance does offer unisex pricing.
Example prices for the policy we listed above are as follows:
The cost can be increased or decreased depending on the policy features you choose. As you can see, the earlier you purchase some type of long term care insurance, the cheaper it is.
For many people, short term care insurance is a great solution for long term care cost planning. Not only does it give you some coverage, it also gives your family and loved ones, as well as you, a year to figure out a plan to pay for care once the insurance stops.
For some people, short term care insurance might not work. We want you to know that you still have options though, ones that we can talk with you about. Cardinal can help you budget to make sure you have some sort of long term care protection in your retirement plan.