None of us wants to be a burden for our children as we grow older, especially in a retirement-friendly state like Florida. And all of us want to avoid financial hardship when our care needs increase. As we decline, we hope that our kids will be there with emotional and caregiving support, but who wants them to dip into their pockets to fund our care in the Sunshine State?

There are many ways to plan for the potential costs of long-term care, and they will all be mentioned here. The best-known method is Long Term Care Insurance. Here is what you should consider.

Long-Term Care Insurance in Florida

Long-term care insurance is designed to help individuals pay for the costs of long-term care services, which can be expensive and are not typically covered by traditional health insurance or Medicare. It is an insurance policy that provides coverage for long-term care services, such as assistance with activities of daily living, including bathing, dressing, and eating, as well as skilled nursing care. It can also provide coverage for adult day care, respite care, and hospice care, which are all important services in Florida’s aging communities.

Since underwriting dictates the cost, underwriters take your health and lifestyle into consideration. So, the better your health, the lower your premiums.

The terms of coverage for long-term care insurance policies can vary widely depending on the insurer and the specific policy. Some policies may allow for family members, including spouses, to be paid caregivers, but this is generally less common. Most long-term care insurance policies are designed to pay for professional care services provided by licensed home care agencies or skilled nursing facilities.

The main purpose of long-term care insurance is to help individuals plan for the potential costs of long-term care so that they can have peace of mind knowing that they will have financial support if they need it. By having long-term care insurance in place, individuals can protect their assets and maintain their independence, as they will have a source of funds to pay for long-term care services without having to rely on their savings or other financial resources.

The amount and type of coverage provided by long-term care insurance policies can vary, so it’s important for individuals to carefully review their options and choose a policy that meets their specific needs and budget. Here are some of the common elements and variations you might encounter when exploring long-term care insurance:

Benefit Amount: This is the maximum amount that a policy will pay for your care on a daily, weekly, or monthly basis. The amount can vary widely, depending on the policy, and will impact the cost of your premiums.

Benefit Period: This is how long the policy will pay for care. It could be a certain number of years (like 2, 3, 5, or 10 years), a specific amount of money to be spent on care, or an unlimited amount of time.

Elimination or Waiting Period: This is the period of time you’ll need to pay for care out of pocket before the policy begins to pay benefits. It’s kind of like a deductible for the policy, and it’s typically 30, 60, 90, or even 180 days.

Inflation Protection: Given that the cost of care is likely to increase over time, many policies offer inflation protection, which increases your benefit amount each year to keep up with inflation. This usually comes at an additional cost.

Types of Care Covered: Policies may cover a range of services, including nursing home care, assisted living facilities, adult day care, home health care, personal or home care aide, and respite care. Some newer policies might also cover modifications to your home, like installing grab bars or wheelchair ramps.

Types of Payments:  Policies provide either indemnity or reimbursement types of benefits.  Simply put, indemnity pays a stated benefit, and reimbursement pays accrued expenses.  They both have pros and cons to them, so speak with a knowledgeable advisor about your preferences.

Non-forfeiture Benefits: If you ever stop paying your premiums, a non-forfeiture benefit can provide you with a reduced amount of benefits based on the amount you’ve already paid into the policy.

Shared Care Rider: If you and your spouse/partner both buy policies, a shared care rider allows you to use your partner’s benefits if you use up all of your benefits.

Waiver of Premium: This provision allows you to stop paying premiums once you’re receiving benefits from the policy.

Keep in mind the cost of long-term care insurance can be quite high, especially if you purchase a policy later in life. When considering long-term care insurance, it’s important to weigh the cost of the premiums against the potential benefits, your personal risk factors for needing long-term care, and your other resources for paying for care.