Commonwise has gone to extraordinary lengths to ensure we exceed Covid safety standards for our clients and caregivers.
Learn more here about our Covid response and protocols. With Commonwise, home remains the safest place for older adults receiving care.

The Only Guide You Need on Long-Term Care Insurance for Elderly Parents

Picture of smiling young lady sitting at home with her grandmother hugging

Written by:

Jeffrey Grossman


December 14, 2020

Are you considering long-term care insurance for elderly parents? You have valid reasons for doing so. Long term care for parents can get expensive quickly. The average cost of a nursing home is $225-$253 a day, which can be a crippling financial blow to unprepared families. Even hiring a home health aide averages about $20/hour, which can quickly add up if your parents need daily assistance.

Do you wonder, “can I buy term insurance for my parents?”

Sadly, too many families discover too late that traditional health insurance doesn’t cover the costs of long-term care. Medicare might step in for up to 100 days of coverage after a surgery or illness, but it won’t help with long-term needs. Buying long-term care insurance for elderly parents can be an important safety net, and help everyone focus on what matters most.

In this post, we’ll walk you through the options of senior care insurance and help you decide if parental insurance is right for your family. Keep reading to learn more!


Senior Care Coverage: What is Long-Term Care Insurance?

Long-term care insurance (LTCI) is there to provide coverage when the effects of aging or disability catch up with you. Unlike traditional health insurance, these policies are designed to cover your long-term care needs, services, and living arrangements.

Most policies are set up to reimburse you for the expenses associated with daily care. This could be in a nursing home, assisted living facility, or home care services. You’ll choose how much you want to be refunded from your daily care expenses, whether it’s $50 a day or $200 a day.

As you might expect, there are considerable price differences between companies and policies. As a general example, a long-term care insurance policy for a 60-year-old couple might range from $2,000-$4,000 per year. Coverage for one individual would be a little less than half that amount.

To apply for a policy, you’ll need to answer some questions about your health and habits. Most companies allow you to make a claim and activate your policy when you have difficulty with at least two of the following:

  • Bathing
  • Dressing
  • Incontinence
  • Eating
  • Getting in and out of bed or a chair
  • Getting on and off the toilet

A diagnosis of dementia or Alzheimer’s is also an acceptable reason to make a claim.


Can You Buy Health Insurance for Your Parents?

Yes, you can! Your parents will still need to do their part for the application and health questionnaire, but you can choose to pay for (or help them pay for) the premiums.

This can give you real peace of mind as your parents age and you face the reality of getting them the help they need.


Does Long-Term Care Insurance Cover Assisted Living?

Long-term care insurance probably won’t cover all the costs associated with assisted living or nursing home care—but it can help.

As explained earlier, though, you can choose the amount to have reimbursed for your care expenses. If you choose $100/day, you’ll receive $3,000 a month in benefits. This can go a long way towards covering some of the costs associated with long-term care.


Long-Term Care Insurance for Elderly Parents: 5 Things to Know

Now that you’re more familiar with senior care coverage, here’s some specific advice to help you find the right policy.


1. Apply Early for Senior Care Insurance

The #1 mistake people make is waiting too long to consider long-term care insurance. Insurers are making it more difficult to qualify for coverage, and many seniors wait until their health is too poor to qualify.

The ideal time to apply for long-term care insurance is when your folks are between the ages of 50-65 and still in good health. The longer you wait, the harder it will be for your parents to qualify (and the higher the premiums will be).


2. Understand How Premiums Are Calculated

Like other types of health insurance, age and general health are the two biggest qualifiers. The younger and healthier your parents are, the more affordable their premiums will be.

Women typically pay more than men because their life expectancy is longer. Other factors that impact premium rates include: the amount of coverage, daily benefit amount (DBA), benefit period, and inflation protection.


3. Don’t Buy Too Much (Or Too Little) Coverage

We all like to save money, but remember you get what you pay for. The cheapest insurance policy might not provide anywhere near the coverage you actually need when the time comes. It’s also more difficult to increase your coverage as you age.

At the same time, you don’t want to pay for extravagant insurance that provides more coverage than you’ll realistically need. If your parents have savings, remember that those funds can be used to cover part of their care (and the insurance will cover the rest).


4. Where to Shop for Long-Term Care Insurance

If you think long-term care insurance for elderly parents is the right move for your family, talk to your insurance agent or financial planner.

Each state has its own regulations and policies, so you’ll need to find out what’s available where you (or your parents) live. Some states are also part of a partnership program that link state policies with private Medicaid coverage.


5. Know Your Alternatives

Depending on your family’s situation, elder care insurance for parents may or may not be your best option. Your parents may choose to purchase an annuity that would help to cover long-term expenses, or they may be able to pay out of pocket from their retirement savings.

For other families, short-term care insurance (one year or less) or accelerated death benefits from a life insurance policy could be the best fit. Speak with your insurance agent to find out what options are available in your area.


What About Home Care Insurance for Seniors?

When it comes to long-term care insurance for elderly parents, the time to start thinking about it is right now. If you haven’t already discussed this option with your parents, make it a point to speak with them soon.

Meanwhile, what can you do to help your parents remain at home while receiving the care they need? Read more about our at home care services or call our Care Team today at 434.202.8565.